o 

I 
m 

Z 

o 

m 

H 
X 


F 

.3 
C53 


r 


BANCROFT 
LIBRARY 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 


H^N 


;0i-  Plaint 


Tucson,  Arizona 

The  Citizen  Printing  and  Publishing 

Company 

1902 


C6'5 


Copies  of  Complaint  With  Exhibits. 

Answer  Without  Exhibits. 

Cross  -  Complaint  With  Exhibit. 

Answer  to  Cross-Complaint. 

Minutes  of  Nogales  Mining  Company. 

Abstract    of  Argument   for 

Temporary   Receiver. 


i\!\\ 


Complaint  With 
Exhibit 


In  the  District  Court,  First  Judicial  District,  Territory 
of  Arizona,   County  of  Santa  Cruz. 

H.  K.  Chenoweth  and  W.  F.  Chenowetli,  Plaintiffs, 

vs. 
Nogales  Mining  Company,  a  Corporation,  R.  A.  McPher- 

son,  Ray  Ferguson,  R.  E.  Doan,  C.  O.  Richards  and 

Jesse  R.  Grant,  Defendants. 

The  above  named  plaintiffs  by  permission  of  the  court 
obtained  to  amend  their  complaint  instanter,  do  now 
file  this  their  amended  complaint  and  in  their  own  be- 
half and  in  behalf  of  all  the  other  stockholders  of  the 
Nogales  Mining  Company,  defendant,  in  a  similar  situa- 
tion, complaining  of  me  above  named  defendants,  allege: 

1.  That  the  Nogales  Mining  Company,  defendant,  is  a 
corporation,  and  that  it  was  duly  organized  under  the 
laws  of  the  Territory  of  Arizona  and  has  its  princippJ 
place  of  business  at  Nogales,  Santa  Cruz  County,  in 
said  Territory;  that  defendant  R.  A.  McPherson  is  a 
Director  and  the  President  of  said  corporation  and  that 


2  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET   AL. 

defendant  Ray  Ferguson  is  a  Director  and  Secretary  and 
Treasurer  of  said  corporation,  and  that  defendant  C.  O. 
Richards  is  a  Director  and  Manager  of  said  corporation, 
and  that  the  defendants  R.  E.  Doan  and  Jesse  R.  Grant  are 
Directors  of  said  corporation,  as  plaintiffs  are  informed 
and  believe. 

2.  That  in  uie  year  1899  plaintiffs  and  defendant  R 
A.  McPherson  were  sole  owners  of  the  Zaragosa  mine, 
situated  in  Curcupe,  District  of  Magdalena,  Mexico;  that 
defendant  R.  A.  McPherson  was  owner  of  one-fourth 
interest  in  said  mining  claim,  ana  plaintiffs  were  owners 
of  three-fourths  interest  in  said  mining  claim;  that 
plaintiffs  and  said  aefendant  McPherson,  being  desirous 
to  develop  said  mining  claim  and  render  it  a  productivf^ 
mine  for  their  profit,  organized  and  incorporated  the 
Nogales  Mining  Company,  defendant  corporation;  that 
thereafter  plaintiffs  and  defendant  McPherson  con- 
veyed to  said  corporation  said  Zaragosa  mining  claim; 
that  plaintiffs  thereafter  expended  large  sums  or  money 
and  performed  much  labor  in  the  development  of  said 
mining  claim;  that  prior  to  the  organization  of  said  com- 
pany plaintiffs  agreed  with  the  defendant  Jesse  R.  Grant 
that  they  would  give  him  a  one-fourth  interest  in  said 
mine  or  in  the  corporation  organized  for  the  purpose  of 
working  said  mine  if  he  would  assist  either  in  the  sale 
of  said  mine  or  in  the  promotion  of  a  company  organized 
to  work  said  mine,  and  said  defendant  Jesse  R.  Grant 
contributed  a  small  sum,  the  exact  amount  being  now  un- 
known, in  bearing  the  expenses  precedent  to  the  sale  of 
said  mining  claim  to  the  Nogales  Mining  Company;  that 
subsequent  to  the  sale  of  said  mine  to  said  mining  com- 
pany, through  the  exertions  of  plaintiffs,  the  stock  of 
said  corporation  was  sold  in  small  amounts  as  herein- 


vs.  NOGALES  MINING  COMPANY  ET  AL.  3 

after  shown,  and  large  sums  of  money  were  borrowed 
through  the  exertions  of  plaintiffs  on  the  credit  of  saia 
corporation  and  on  the  plaintiffs'  private  credit,  towi". 
some  $70,000;  that  at  the  first  meeting  of  the  Nogaies 
Mining  Company  the  plaintiff  H.  K.  Chenoweth  was 
chosen  President  of  said  company,  and  was  President 
continuously  until  auring  the  month  of  April,  1901,  as 
hereinafter  shown,  and  that  plaintiff  W.  F.  Chenoweth 
was  one  of  tue  Directors  of  said  company  auring  tlie 
same  period;  that  from  the  time  of  tne  organization  of 
said  company  untxi  during  the  month  of  April,  1901, 
plaintiffs  were  for  all  purposes  the  active  agents  and 
representatives  of  said  corporation  and  were  recognized 
as,  and  were,  the  members  of  said  corporation,  having 
the  largest  interest  and  the  greatest  investment  in  said 
corporation;  that  from  time  to  time  at  the  will  of  said 
plaintiffs  shares  oi  stock  in  said  corporation  were  issued 
to  different  persons  to  secure  their  services  in  assistance 
of  the  promotion  of  said  corporation;  that  in  the  montn 
of  April,  1901,  ixxe  total  amount  of  stock  in  said  corpora- 
tion that  had  been  issued,  as  plaintiffs  believe  to  be 
shown  by  tlie  books  of  said  company,  was  19,509  shares 
of  the  par  value  of  $10.00  each,  out  of  the  total  .xu- 
thorized  capital  of  50,000  shares,  of  tne  par  vaiue  of  $10.00 
each,  the  remaining  shares  being  at  that  time  in  the 
treasury  of  said  corporation  as  treasury  stock;  that  of 
the  shares  issued  up  to  April,  1901,  plaintiffs  jointly  were, 
and  still  are,  owners  of  7600  shares;  that  in  July,  1900, 
plaintiff  W.  F.  Chenoweth  was  dected  Manager  of  said 
company  and  was  empowered  and  instructed  to  com- 
duct  the  uevelopment  of  the  mining  claim  belonging  to 
said  company,  to  erect  the  necessary  buildings,  mill, 
machinery,  and  pumping  plant,  and  other  improvements 


•4  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

thereon;  that  the  plaintiff  W.  F.  Chenowetn  continued  as 
such  Manager,  devoting  nis  entire  time  and  attention  to 
the  development  and  improvement  ot  said  mining  claim, 
until  in  April,  1901,  and  that  during  most  of  that  time 
plaintiff  H.  K.  Chenoweth  devotcv^  his  entire  time  to  de- 
veloping the  interests  of  said  company  and'  obtaining 
loans  and  selling  stock,  to  obtain  capital  for  the  work 
of  said  company,  and  that  during  the  period  of  time  un- 
der plaintiff's  management  there  was  expended  on  said 
mining  claim  in  its  development,  and  in  the  erection  of  a 
mill,  pumping  plan.,  machinery,  and  other  improvements, 
in  the  neighborhood  of  $80,000.00,  the  exact  amount  of 
which  plaintiff  cannot  now  show,  as  will  be  hereinafter 
explained;  that  in  April,  1901,  and  just  prior  thereto,  per- 
sonal differences  of  opinion  as  to  the  method  of  manag- 
ing the  Nogales  Mining  Company,  arose  between  the 
plaintiffs  and  other  stockholders  of  said  corporation,  and 
that  the  stockholders  who  differed  from  plaintiffs  in 
the  management  of  saia  corporation  represented  their 
differences  through  the  defendant  Jesse  R.  Grant;  that 
on  the  12th  day  of  April,  1901,  plaintiffs  and  defendant 
Jesse  R.  Grant,  and  one  J.  A.  v^ooper,  a  stockholder 
in  said  corporation,  entered  into  a  certain  agreement  in 
the  City  of  Hermosillo,  Sonora,  Mexico,  executed  be- 
fore a  Mexican  Notary  Public,  a  translation  of  which 
agreement  is  attached  hereto,  marked  "Exhibit  A;"  that 
contemporaneously  with  said  agreement  plaintiffs  and 
defendant  Jesse  R.  Grant  entered  into  an  agreement  ex- 
pressly made  part  of  the  before  mentioned  agreement 
and  depending  in  its  fulfillment  upon  the  fulfillment  of 
the  before  mentioned  agreement,  a  copy  of  which 
last  mentioned  agreement  is  attached  hereto 
marked     "Exhibit  B;"    that  relying    upon    the    prom- 


VS    NOGALES   MINING   COMPANY'  ET  AL.  5 

ises  made  by  the  said  Cooper  and  the  said  de- 
fendant Grant  in  said  agreements  plaintiffs  resigned 
trom  their  offices  in  the  Nogales  Mining  Company  and 
surrendered  the  voting  power  of  their  stock,  subject  only 
to  the  reservations  in  said  agreements  set  forth,  to  said 
defendant  Grant,  relying  and  believing  in  good  faith  that 
defendant  Grant  would  fultill  his  promises  to  plaintiifs 
and  would  settle  ail  the  obligations  of  said  company  and 
would  pay  for  plaintiffs'  interests  as  stipulated  in  the 
said  agreements;  that  plaintiffs  have  fulfilled  every  part 
of  their  agreement;  that  following  upon  the  execution 
of  said  contracts,  at  the  succeeding  annual  meeting,  the 
stockholders  present  elected  a  new  Board  of  Directors, 
electing  as  Directors  the  defendants  (expect  the  corpora- 
uonj  in  this  cause;  tuat  piaintiffs  are  now  informed  and 
believe  that  defendant  Grant  had  no  intention  of  per- 
forming his  agreement  m  the  contracts  entered  into 
but  that,  conspiring  with  other  defendants,  he  purposed 
to  exclude  plaintiffs  from  all  profits  and  advantages  of 
this  corporation  and  by  deceiving  them  and  thus  getting 
them  off  the  Board  of  Directors,  to  gain,  with  others  of 
said  defendants,  personal  control  of  said  corporation,  to 
wreck  said  corporation,  and  to  become  himself,  with 
others  of  said  defendants,  sole  owners  of  the  property  of 
said  company;  that  at  the  time  of  the  election  of  de- 
fendants (except  the  corporation)  as  Directors  of  the 
fendant  corporation,  defendant  Doan  was,  and  is  owner 
of  2340  shares  of  the  stock  of  said  corporation;  that 
defendant  McPherson,  as  plaintiffs  are  informed  and  be 
lieve,  was  owner  of  one  share  of  the  stock  of  said  cor- 
poration; that  defendant  Ricnards,  as  plaintiffs  are  in- 
formed and  uelieve,  was  owner  of  one  share  of  the  stock 
of  said  corporation;    that  defendant  Ferguson  was  the 


6  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

owner  of  one  share  of  the  stock  of  said  corporation;  and 
that  defendan.  Grant  was  owner  of  1408  shares  of  the 
stock  of  said  corporation. 

3.  Plaintiffs  further  show  that  at  the  time  of  the  exe- 
cution of  the  contracts  hereinbefore  mentioned,  piaintiff 
W,  F.  Chenoweth  as  Manager  of  said  corporation  rend- 
ered an  accounting  in  which  there  was  shown  to  be  due 
to  him  a  balance  for  moneys  expended  in  behalf  of  de- 
fendant corporation  in  the  sum  of  $3,833.35;  that  his  ac- 
counts were  audited  by  said  corporation  and  appuovet , 
and  that  thereupon  he  turned  over  to  the  representative 
of  said  corporation  all  the  books,  vouchers,  accounts  and 
papers  belonging  to  said  corporation  or  pertaining  in 
any  wise  lo  said  W.  F.  Chenoweth's  accounts  as  Managar 
of  said  corporation,  keeping  no  copies  thereof,  ana  tha^ 
for  this  reason  plaintiffs  are  not  able  to  state  in  exact 
figures  certain  sums  of  money  heretofore  mentioned,  and 
hereafter  to  be  mentioned. 

4.  Plaintiffs  furc..er  snow  that  at  the  time  saia  con 
tracts  were  executed  defendant  corporation  was  in- 
debted to  one  Henrietta  Stewart  of  Washington,  D.  C, 
in  the  sum  of  $63,500.00,  and  to  one  C.  Ramirez  of 
Nogales,  Sonora,  Mexico,  in  the  sum  of  $5,000.00,  and  to 
plaintiff  W.  F.  Cnenoweth  in  the  sum  of  $3,833.35,  and  to 
other  persons  in  various  small  sums  aggregating  about 
$7,000.00,  making  the  total  indebtedness  of  said  corpora- 
tion at  that  time,  so  far  as  is  known  to  plalntilfs,  ap- 
proximately $7y,o33.3o;  tha/t  on  the  mining  claim  belong- 
ing to  said  company  there  haa  been  erected  a  20-stamp 
mill  with  equipment,  and  a  pumping  plant  wiih 
equipment,  at  a  contract  pnce  of  $35,000.00;  that  other 
improvements  in  the  way  of  buildings  and  mining  im- 
plements to  the  value  of  many  thousand  dollars,  the  ex- 


VS    NOGALES  MINIKG  COMPAlS^y  ET  AL.  7 

aci  amount  of  which  plaintiff  cannot  state,  were  on  said 
mining  claim  belonging  to  said  company;  tnat  the 
Articles  of  Incorporation  of  said  company  permit  a 
maximum  indebtedness  of  $80,000.00;  that  said  mining 
•claim  if  properly  developed  and  worked  is  of  ample  value 
to  pay  all  indebtedness  of  sa.a  corporation;  that  the 
defendant  Directors  of  said  corporation  have  fraudtilently 
c-onspired  to  freeze  out  plaintiffs  from  all  the  benefits 
of  said  corporation;  that  thvey  used  the  eoniract  here- 
inbefore described  as  the  means  of  obtaining  control  of 
said  corporation  and  its  property  in  oad  faith  and  to 
accomplish  the  destruction  of  said  corporation  during 
the  time  that  plaintiffs  were  out  of  control,  and  cause  the 
sale,  as  plaintiffs  are  inform*.-  ana  believe,  to  tuem- 
selves,  or  to  a  corporation  organized  by  themselves,  of 
all  the  property  of  said  defendant  corporation,  and  lo 
this  end  th'^'y  procured  the  creditor  Henrietta  Stewart 
to.  institute  an  attachment  suit  in  the  courts  of  Mexico 
and  levy  an  attachment  upon  the  property  of  said  cor- 
por^,tion,  disregarding  their  duties  as  Directors  and 
officers  of  said  corporation,  and  failing  to  in  any  wise 
defend  said  suit;  tuat  further  lo  carry  out  their  purpose 
they  mortgaged  all  the  property  of  said  corporation  to 
defendant  C.  O.  Richards  for  an  alleged  loan  of  $15,- 
000.00  and  are  permitting  said  Richards  to  foreclose  the 
company  of  all  title  to  cne  company's  properiy  py  pro- 
ceedings in  Mexico  without  defending  the  same;  that 
there  is  no  provision  in  the  Articles  of  Incorporation 
whereby  plaintiffs  can  secure  a  meeting  of  the  stock- 
holders of  said  corporation  and  the  election  of  a  new 
Board  of  Directors;  that  by  the  failure  of  the  defendant 
Grant  to  perform  his  part  of  the  contracts  heretofore 
mentioned  plaintiffs  are  now  in  full  right  stockholders 


8  PAPERS  IN  THE  CASE  OP  CHENOWETH  ET  AL. 

and  owners  of  their  shares  of  stock  in  said  corporation 
as  heretofore  shown;  tnat  the  defendant  Directors  are  now 
arranging,  as  plaintiffs  are  imormed  and  believe,  to 
transfer  by  deed  all  the  property  of  said  corporation  to 
a  new  corporation  organized  by  defendant  Directors, 
their  purpose  being,  as  plaintiffs  are  informed  and  be- 
lieve, to  use  tne  proceedings  against  said  corporation  by 
said  Henrietta  Stewart  and  said  C.  0.  Richards,  as  a 
cloak  to  cover  tne  transactions  whereby  they  may  gain 
sole  control  of  the  mining  claim  belonging  to  said  cor- 
poration, and  of  its  property  and  improvements,  and 
thus  render  plaintiffs'  interest  .n  said  corporation  of  no 
value,  and  cause  them  to  lose  all  they  have  invested  in 
said  corporation;  that  the  alleged  loan  of  $15,000.00 
from  said  C.  O.  Richards  is  in  addition  to  the  oblir^ations 
heretofore  name.-  by  plaintiffs,  and  if  a  genuine  indebted- 
ness, renders  the  total  indebtedness  of  said  defendant 
corporation  far  in  excess  of  the  maximum  allowed  by  its 
Articles  of  Incorporation;  that  if  defendants  are  allowed 
to  carry  out  the  plans  upon  which  they  havp  embarked, 
the  creditors  of  said  corporation  will  be  defrauded  of 
their  dues,  the  stockholders  of  said  corporation  who  are 
not  parties  to  this  conspiracy  will  lose  all  their  invest- 
ment, and  said  corporation  will  be  wrecked;  that 
plaintiffs  believe  that  in  the  application  herein  to  be 
made  they  represent  the  majority  of  stockholders  of  &aid 
defendant  corporation;  that  if  a  meeting  of  the  stock- 
holders could  legally  be  held  and  a  new  Board  of  Direct- 
ors legally  be  elected,  a  Board  of  Directors  who  v/ould 
honestly  and  for  the  best  interests  of  the  company  con- 
duct its  affairs,  would  be  elected;  that  the  final  failure  of 
the  contracts  hereinbefore  mentioned  could  not  be 
known,  as  is  evident  from  the  contracts  themselves,  un- 


vs.  NOGALES  MINING  COMPANY  ET  AL.  9 

til  the  12th  day  of  this  current  month;  that  the  stock- 
holders other  than  defendants  and  plaintiffs  live  so  re- 
mote from  Santa  Cruz  County  that  plaintiffs  cannot 
without  such  loss  of  time  as  would  still  farther  en- 
danger the  rights  and  interests  of  themselves  and 
other  stockholders  in  like  situation,  procure  them  to  join 
with  plaintiffs  in  this  complaint,  and  therefore  bring 
this  suit  in  their  own  behalf  and  in  behalf  «if  ail  the 
other  stockholders  of  the  defendant  corporation  except 
the  defendants. 

•5.  That  plaintiffs  have  no  adequate  remedy  at  law; 
tnat  the  damage  threatened  by  defendants,  and  already 
done  by  defendants,  is  irreparable;  that  under  their 
management  the  property  of  the  company  is  being 
wasted  and  made  away  with;  that  these  defendants  and 
none  of  them  can  respond  in  damages  to  plaintiffs  for 
their  conspiracy  and  fraud, 

6.  Plaintiffs  further  show  that  as  plaintiffs  are  in- 
formed and  believe  the  said  defendants  refuse  to  recog- 
nize plaintiffs  as  stockholders  in  said  defendant  corpo- 
ration, asserting  as  plaintiffs  are  informed  and  believe 
that  by  virtue  of  the  contract  filed  herewith  and  mark- 
ed "exhibit  B,"  the  said  plaintiffs  have  lost  all  right, 
title  and  interest  in  and  to  their  shares  of  stock  in  said 
defendant  corporation;  that  defendants  have  transferred 
on  the  books  of  the  defendant  corporation  2800  shares  of 
the  stock  formerly  issued  to  the  said  plaintiffs  to  the 
said  defendant  C.  O.  ^^ichards  under  an  assignment,  as 
plaintiffs  are  informed  and  oelieve,  from  the  defendant 
Jesse  R.  Grant,  said  assigment  and  transfer  being  al- 
leged to  be  made  by  virtue  of  the  said  contract. 

7.  Plaintiffs  further  show  that  tnere  should  be  deliv- 
ered to  said  plaintiffs  3800  shares  of  stock  in  said  cor- 


10  PAPERS  IX  THE  CASE  OF  CHENOWETH  ET    AL. 

poration  as  provided  by  the  resolutions  of  tne  stock- 
holders of  the  said  defenaant  corporation  made  on  Jan- 
uary 12th,  A.  D,  1901,  and  shown  on  the  minutes  of  said 
meeting,  which  said  stock  aefendants  have  refused  to 
issue  to  said  plaintiffs,  and  continu'i  so  to  refuse. 

Wherefore  plaintiffs  pray: 

1st.  For  judgment  requiring  the  defendants  to  cancel 
the  shares  of  stock  in  said  defendant  corporation  issued 
to  the  said  C.  O.  Richards  and  belonging  to  plaintiffs, 
and  to  re-issue  the  said  stocK  to  plaintiffs. 

2nd.  For  judgment  requiring  defendants  to  issue  to 
plaintiffs  3800  shares  of  stock  in  said  defendant  corpora- 
tion as  provided  in  the  meeting  of  cae  stockholders  of 
January  12th,  xv.  D.  1901. 

3rd.  For  judgment  requiring  defendants  to  recognize 
plaintiffs  as  stockholders  in  said  defendant  corporation, 
and  to  give  them  full  rights  as  such  stockholders. 

4th.  For  a  writ  of  injunction  enjoining  the  aefend- 
ant  C.  O.  Richards  from  proceeding  in  any  court  or  by 
means  of  any  sale  to  foreclose  any  mortgage  given  to 
him  by  the  defendant  corporation  and  from  transferring 
to  any  person  or  persons  his  rights  under  said  mortgage 
and  from  directly  or  indirectly  procuring  or  permitting 
any  other  person  or  persons  to  foreclose  said  mortgage, 
or  procuring  or  permitting  the  sale  of  the  property  or 
any  part  thereof  of  the  defendant  corporation,  mort- 
gager, for  the  payment  or  part  payment  of  the  debt  for 
which  said  mortgage  is  security. 

5th.  For  judgment  declaring  the  alleged  indebtedness 
to  the  said  C.  O.  Richards  secured  by  the  said  mortgage 
to  be  null  and  void. 


•     r 
vs.  NOGALES  MINING  COMPANY  ET  AL.  11 

6th.  For  a  writ  of  injunction  prohibiting  the  defend- 
ants or  any  one  of  them  from  adding  in  any  respect  or 
in  any  manner  to  the  indebtedness  of  the  said  defendant 
corporation. 

7th.  For  the  appointment  of  a  receiver  to  tal^e 
charge  and  to  keep  the  mining  claim,  mill,  pumping 
plant,  buildings,  tools,  machinery,  moneys,  credits,  trea- 
sury stock,  and  all  other  property  of  any  nature  whai- 
soever  of  said  corporation,  and  to  preserve  the  same, 
pending  final  judgment  in  this  cause,  and  pending  fur- 
ther order  of  this  court,  and  to  defend  suits  brought 
against  said  corporation,  and  to  bring  suits  in  behalf 
of  said  corporation,  in  any  court,  or  for  any  purpose 
necessary  for  the  protection  of  the  property  or  interests 
of  said  corporation  and  its  shareholders. 

8th.  For  judgment  ordering  the  dissolution  and  wind- 
ing up  of  the  defendant  corporation,  and  for  the  appoint- 
ment of  a  receiver  to  wind  up  the  affairs  of  the  defendant 
corporation,  to  sell  its  property  under  the  orcers  of  this 
court  and  to  apply  the  proceeds  thereof  to  the  indebted- 
ness of  the  said  corporation  under  the  orders  of  this 
court,  and  to  conclude  all  the  business  of  the  said  cor- 
poration and  distribute  such  surplus  assets  as  there  may 
be  among  the  shareholders  of  the  said  corporation  und'jr 
the  orders  of  this  court. 

9th.  For  such  further  or  other  or  different  order 
in  the  premises  as  to  the  court  may  seem  good. 

H.  K.  Chenoweth  and  \v.  F.  Chenoweth, 
By   Frederick   S.   Nave,   their  Attorney. 


32  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET   AL. 

Territory  of  Arizona,      [ 
County  of  Santa  Cruz.  \^^' 

W.  F.  Chenoweth,  being  duly  sworn,  deposes  and  says: 
That  he  is  one  of  the  complainants  in  the  above  en- 
titled cause;  that  he  iias  read  the  foregoing  complaint, 
and  knows  the  contents  thereof,  and  the  same  is  true  of 
his  own  knowledge,  except  the  matters  therein  stated  on 
information  ana  belief,  and  that  as  to  those  matters  he 
believes  it  to  be  true. 

W.  F.  Chenoweth. 
Subscribed  and  sworn  to  before  me  this  4th  day  of 
.January,  A.  D.  1902. 

Frederick  S.  Nave, 
Notary  Public. 
(Seal)  ^_ 

"EXHIBIT  A." 

In  the  city  of  Hermosillo,  capital  of  the  State  ol 
Sonora,  Republic  of  Mexico,  on  the  twelfth  day  of  the 
month  of  April,  one  thousand  nine  hundred  and  one, 
before  me.  Attorney  J.  Guillermo  Dominguez,  Notary 
Public,  in  my  ofiBcial  capacity,  and  before  the  witnesses 
Messrs.  Eduardo  Weidner  and  Ambrosio  I.  Lellevier,  of 
lawful  age,  residents  of  this  vicinity  and  having  the 
legal  qualifications  to  testify,  appeared  for  the  one 
part  Dr.  William  F.  Chenoweth,  in  his  own  behalf  and 
also  as  a  representative  of  his  brother,  H.  K.  Cheno- 
weth, as  is  shown  by  a  power  of  attorney  as  will  here- 
after appear,  and  for  the  other  part  Messrs.  Jesse  K. 
Grant,  in  his  own  behalf,  and  James  A.  Cooper,  in  his 
own  behalf  and  also  as  a  representative  of  the  Cerro 
Prieto  Mining  Company,  Anonymous  Society,  as  is  shown 


vs.   NOG  ALES   MINING   COMPANY   ET  AL  IS 

iDy  the  document  which  will  hereafter  be  spoken  of,  all 
x3ontracting  parties  being  of  lawful  age  and  residents  of 
Nogales,  Arizona,  United  States  of  America,  and 
temporarily  residents  of  this  city  for  the  purpose  of 
contracting  and  obligating,  and  whom  1  certify  to  know 
personally,  and  declared  that  they  have  executed  th<> 
contract  for  the  purchase  and  sale  which  is  set  iorrh  in 
the  following  articles. 

First  Dr.  William  F.  Chenowetli  declares  that  his 
brother,  H.  K.  Chenoweth,  is  the  owner  in  property  and 
control  of  twenty-five  free  shares,  numbered  from  one 
to  twenty-five  inclusive,  of  the  capital  «tock  of  the 
Cerro  Prieto  Mining  Company,  Anonymous  Society, 
and  the  declarant  is  the  owner  also  in  property  and 
control  of  twenty-five  shares  not  free,  numbered  from 
76  to  100  inclusive,  of  the  same  company  of  .  Cerro 
Prieto,  the  said  fifty  shares  belonging  lo  the  first 
series;  that  Mr.  H.  K.  Chenoweth  acquired  his  shares 
by  transferring  to  the  business  of  the  Cerro  Prieto  the 
mines  "Elisa"  and  "Grant"  as  social  capital,  and  the 
declarant  Dr.  William  F.  Chenoweth  acquired  his  shares 
by  adding  to  the  same  company  two  thousand  nine  hun- 
dred dollars  Mexican  silver  as  his  proportional  part  cf 
the  social  fund,  all  of  which  appears  in  the  organic 
writing  of  sai^  company,  executed  on  the  twelfth  day 
oi  March,  one  thousand  nine  hundred,  before  the  un- 
dersigned Notary,  and  duly  attested  in  the  3ook  of 
Registry  of  Shares  of  said  company,  which  documents 
I  the  undersigned  Notary  certify  to  have  before  me. 

Second.  The  said  Dr.  William  F.  Chenoweth  de- 
clares that  the  twenty-five  shares  of  his  brother,  H.  K. 
Ciienoweth,  by  virtue  of  the  representation  with  which 


U  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

he  is  accredited  and  me  twenty-five  shares  which  be- 
lung  to  the  declarant  in  his  own  right,  he  sells,  codt^s, 
and  conveys  to  Mr,  Jesse  K.  Grant,  for  the  oum  of 
thirty  thousand  dollars  gold  monry  of  the  United  States 
of  America,  which  amount  the  said  Jesse  R.  Grant  is  to 
deliver  to  the  declarant,  Dr.  Chenoweth,  inside  ol  six 
months,  counted  from  the  date  ol  the  present  writing,  in 
this  city  of  Hermosillo. 

Third.  The  first  evidence  of  the  present  writing,  duly 
registered,  and  the  fifty  shares  before  mentioned,  shall 
be  deposited,  in  a  closed  and  sealed  package,  m  the 
Bank  of  Sonora,  with  a  simple  copy  of  the  same  writing 
for  the  information  of  said  bank,  stipulating  that  the 
Bank  of  Sonora  alone  Snall  deliver  the  fifty  shares 
referred  to,  together  with  the  evidence  of  ihis  writing, 
to  Mr.  Jesse  R.  Grant,  when  he,  inside  of  the  six 
months  fixed,  shall  present  to  it  a  receipt  from  Dr. 
William  F.  Chenoweth  Dy  which  he  acknowledges  that 
he  has  received  from  Mr.  Grant  the  thirty  thousand  dol- 
lars gold,   the  price  of  tuis  sale. 

Fourth.  If  at  the  conclusion  of  the  six  months  before 
mentioned  Mr.  Grant  has  not  delivered  to  Mr.  Cheno- 
weth the  sax^  thirty  thousand  aollars  gold,  then  Mt. 
Chenoweth  shall  recover  from  the  Bank  of  Sonora  the 
package  containing  the  fifty  shares  and  the  evidence  of 
this  writing,  holding  as  rescinded  this  plan  of  con- 
tract without  the  necessity  of  a  judicial  decision,  and 
Mr.  Grant  shall  lose  ^y  the  way  of  forfeit  that  which  up 
to  this  time  he  has  given  to  Mr.  Chenoweth. 

Fifth.  Mr.  Jesse  R.  Grant  moreover  obligates  himself 
to  pay  all  the  bills  which  the  business  of  the  Nogales 
Mining  Company,  Anonymous  Society,  has  in  Arizona 
and  Sonora,  which  bills  have  been  reviewed  by  ihe  said 


vs.  N0GALE8  MINING  COMPANY  ET  AL.  15 

Mr.  Grant,  and  also  to  pay  those  which  have  not  Teen 
reviewed  but  are  legal  and  were  contracted  Jnring  the 
months  of  April  and  March  of  the  present  year. 

Sixth.  Mr.  James  A.  Cooper,  in  his  capacity  of 
Vice-President  of  the  Cerro  Prieto  Mining  Company, 
Anonymous  Society,  as  expressly  authorized  by  ♦^he 
General  Assembly  of  Stockholders,  as  app-^ars  by  the 
documents  which  will  hereafter  be  spoken  of,  declares 
that  in  tlie  name  of  the  Cerro  Prieto  Mining  Company, 
Anonymous  Society,  he  obligates  the  said  company 
that  it  will  not  moitf  age,  hypothecate  nor  transfer,  in 
any  manner,  neither  in  whole  nor  in  part,  the  business, 
until  the  thirty  thousand  dollars  in  gold  of  which  this 
writing  treats,  shall  be  paid  to  Mr.  William  P.  Cheno- 
weth. 

Seventh.  The  said  Mr.  Cooper  declares  that  the 
Messrs.  Dr.  William  F.  Chenoweth  and  H.  K.  Cbeno- 
wetn  shall  be  held  free  of  all  liability  under  the  posi- 
tions which  they  hold  in  the  management  of  the  Cerro 
Prieto  Mining  Company,  Anonymous  Society,  and  the 
Nogales  Mining  Company,  Anonymous  Society,  tho  two 
companies  renouncing  all  their  claims  and  actions 
which  they  might  have  against  the  said  Messrs.  Cheno- 
weth. 

Eighth.  The  said  Mr.  Cooper  declared  that  the  busi- 
ness of  the  Cerro  Prieto  Mining  Company,  Anonymous 
Society,  exempts  the  Messrs.  Chenoweth  from  the  obliga- 
tion which  they  have  been  unuer  by  the  agreement  to  sell 
to  the  company  the  mines  WixiCh  they  had  denounced, 
permitting  them  from  now  on  and  .for  all  time  to  make 
said  mines  their  own,  as  their  own  property  acquired 
with  a  legal  title. 


16  PAPERS  IN  THE  CASE  OF  CHENO\TETH  ET  AL. 

Ninth.  The  said  Mr.  Cooper,  in  the  name  cf  the 
Cerro  Prieto  Mining  Company,  Anonymous  Society,  sells, 
cedes  and  transfers  to  ^iie  Messrs.  Chenoweth  three 
fourth  part  remaining,  making  the  transfer  as  an  addi- 
the  company,  as  is  shown  by  the  writing  of  the  twelfth 
of  April,  one  thousand  nine  hundred,  executed  by  L.  B. 
Harris  and  M.  R.  Harris,  his  wife,  in  Oakland,  State 
of  California,  in  favor  of  the  Company  of  Cerro  }*ritto, 
which  document  I  the  unuersigned  Notary  certify  to 
have  before  me,  the  said  Mr.  Cooper  reserving  the 
fourth  parts  of  the  mine  callea  "San  Diego,"  property  of 
tion  to  the  price  of  sale  of  the  shares  of  the  Messrs. 
Chenoweth. 

Tenth.  The  direction  of  the  Cerro  Prieto  Mining 
Company,  Anonymous  Society,  when  the  present  instru- 
ment shall  be  signed,  shall  remain  in  the  control  of  C. 
O.  Richards,  Dr.  Chenoweth  in  consequence  provision- 
ally yielding  control  for  the  term  of  six  months  which 
has  been  fixed  in  the  present  writing;  but  if  the  .^aid 
writing  is  rescinded  because  oi  the  failure  to  fulfill  the 
contract,  then  Dr.  Wiiiiam  F.  Chenoweth  shall  continue 
to  exercise  the  control  as  Director  General  of  the  com- 
pany until  the  end  of  his  legal  term. 

Eleventh.  The  said  Mr.  Cooper,  and  likewise  Mr. 
Jesse  R.  Grant,  declares  that  the  failure  to  fulfill  any 
stipulation  of  the  present  writing  shall  be  sufficient 
cause  for  rescinding  the  present  contract,  holding  it  as 
terminated  without  the  necessity  of  a  judicial  decision. 
In  the  same  manner  and  unaer  the  same  conditions,  Mr. 
H.  K.  Chenoweth  ceases  to  exercise  his  office  of  Trea- 
surer and  Commissary  of  the  company  for  the  same 
term  of  six  months,  Mr.  R.  A.  McPherson  being  appoint- 
ed .n  his  place.  If  at  the  end  of  the  six  months  the  pres- 


vs.  NOGALES  MINING  COMPANY  ET  AL.  17 

ent  writing  is  fulfilled  in  all  its  stipulations  then  the; 
Messrs.  Cnenoweth  shall  finally  cease  to  exercise  their 
control. 

Twelfth.  Dr.  William  F.  Chenoweth  is  personally  ac- 
credited in  that  which  concerns  his  brother,  H.  K. 
Chenoweth,  by  a  general  rower  of  Attorney  executeu 
before  the  undersigned  Notary  the  sixteenth  day  of 
February,  one  thousand  nine  nundred;  and  Mr.  James 
A.  Cooper  is  duly  authorized  by  the  Book  of  Acts  of 
the  Cerro  Prieto  Mining  Company,  Anonymous  Society, 
in  which  book  I  the  undersigned  Notary  certify  to  have 
seen  an  Act  marked  number  six  corresponding  to  the 
extraordinary  session  of  the  General  Assembly  of 
Stockholders,  -in  which  \ct  is  shown  the  authorization 
and  approval  of  that  which  this  contract  contains,  he 
being  shown  in  said  Act  to  be  duly  commissioned  to 
execute  the  same  in  these  articles  which  it  has  au- 
thorized. 

Thus  they  executed  this,  and  it  being  read  to 'them 
by  the  interpreter,  Mr.  Carlos  H.  Milles,  they  ratified 
it  in  all  its  parts,  and  signed  it  with  the  witnesses  and 
the  interpreter  in  my  presence.  1  certify  that  the  con- 
tracting parties  declarea  that  Mr.  Jesse  R.  Grant  is  to 
•assume  the  payment  of  all  bills  of  tne  Nogales  Mining 
Company,  Anonymous  Society,  with  which  it  is  chargea 
in  Arizona  and  Sonora;  also  the  accounts  of  March  and 
April  of  which  the  fifth  article  of  thiS  writing  speaKs. 
And  the  said  Jesse  R.  Grant  is  subrogated  to  the  rights 
of  the  creditors  against  the  Nogales  Mining  Company, 
Anonymous  Society,  but  the  amounts  which  tnose  bills 
represent  he  only  advances  in  tne  character  of  a  loan 
to  pay  said  debts,  having  for  that  a  right  by  which  said 


18  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

Company   of   Nogales   shall   repay   uim   that   which   he 
pays  in  its  behalf. 

Mr.  Chenoweih  declares  on  his  part  that  the  business 
of  the  Cerro  Prieto  Mining  Company,  Anonymous 
Society,  is  not  mortgaged  nor  hypothecated  nor  trans- 
ferred to  any  person,  but  is  entirely  free  of  aL  debt  and 
ail  obligation;  and  the  said  Mr.  Chenoweth  obligates 
himself  to  put  Mr.  Grant  in  absolute  possession  of  the 
property.  Mr.  Chenoweth  also  declares  that  up  to  this 
date,  as  is  shown  in  the  Book  of  Register  ot  the  com- 
pany, only  one  hundred  shares  oi  the  first  series  have 
been  issued. 

Signea: 

Jesse  R.  Grant. 

W.  F.  Chenoweth. 

Carlos  R.  Milles,  Interpreter. 

Jas.  A.  Cooper. 

Eduarc.0   Vveidner,  Witness. 

A.  I.  Lellevier,  Witness. 

J.  Guillermo  Dominguez,  Notary  Public. 
Simpxe  copy. 


"EXHIBIT   B." 

Nogaies,  Ariz.,  April  12,  1901. 

Memorandum  of  an  agreement  entered  into  this  12th 
day  of  April,  1901,  by  ana  between  W.  F.  Chenoweth  and 
H.  K.  Chenoweth,  parties  of  the  first  part,  and  Jesse  R. 
Grant,  party  of  the  second  part. 

Witnesseth:  That  in  consideration  of  five  thousand 
dollars  United  States  current  money,  to  be  paid  to  the 
party  of  the  first  part  by  party  of  the  second  part, 
the  said  party  of  the  first  part  agrees  to  sell,  transfer 


vs.  NOGALES   MINING   COMPANY  ET  AL.  39 

and  assign  to  cue  party  of  the  second  part,  all  their 
right,  title  and  interest  in  all  the  stock  owneG  hy  tnem 
in  the  Nogales  Mining  Company,  a  corporation,  formed 
under  the  laws  of  the  Territory  of  Arizona,  and  having 
its  principal  office  in  Nogales,  Arizona,  reserving  only 
such  stock  as  represents  700  shares  out  of  the  50,000, 
which  interest  we  iiave  previous  to  this  agreement  con- 
tracted to  deliver  to  other  parties. 

Further  it  is  agreed  that  this  contract  shall  not  con- 
flict with,  but  shall  become  a  part  of  a  certain  contract 
and  agreement  entered  into  on  the  11th  day  of  April, 
1901,  in  the  city  of  Hermosillo,  for  the  transfer  of  50 
shares  of  stock  in  the  Cerro  Prieto  Mining  Company,  a 
corporation  existing  under  the  laws  of  the  State  of 
Sonora,  Republic  of  Mexico,  wnereby  the  full  amount 
the  parties  of  the  first  part  shall  receive  is  thirty-five 
thousand  ($35,000.00)  dollars  United  States  gold  coin, 
and  this  document  is  a  receipt  for  five  thousand  ($5,000) 
dollars.  The  other  thirty  thousand  ($30,000.00)  dollars 
shall  be  paid  within  six  months  rrom  the  date  of  sign- 
ing: of  the  contract  with  the  Cerro  Prieto  Mining  Com- 
pany before  mentioned,  viz:  the  11th  day  of  April, 
1901,  making  this  contract  or  agreement  void  after 
October  11th,  1901. 

Further  it  is  agreed  that  the  party  of  the  second  part 
accepts  this  contract,  relieving  the  parties  of  the  first 
part  from  all  responsibility  and  turther  agrees  to  carry 
out  all  legal  contracts  and  pay  all  legal  bills.  Further 
the  party  of  the  iirst  part  agrees  to  see  that  a  certain 
option  given  to  one  R.  A.  McPherson,  by  one  of  the 
parties  of  the  first  part  on  or  about  February  25th, 
1901,  and  which  said  first  party  considers  void,  but  in 
order  to  avoid    he  expense  of  defending  any  suit  said 


20  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

McPherson  might  ins.,igate,  said  second  party  agrees  to 
have  said  option  duly  cancelled  and  does  hereby  relieve 
said  first  party  from  all  reliability. 

Further  the  parties  of  the  first  part  hereby  direct  the 
Secretary  of  the  Nogales  Mining  Company  to  enter  the 
contents  of  this  contract  on  the  books  of  the  com- 
pany, and  we  authorize  said  Secretary  to  accord  to  said 
second  party  the  full  voting  power  of  the  stock  owned 
by  the  said  first  parties  during  the  term  of  this  con- 
tract, and  upon  the  fulfillment  of  the  same  to  cancel  said 
stock  as  represented  in  this  contract  and  reissue  the 
same  to  the  saia  second  party. 

Further,  the  said  first  parties  do  hereoy  authorize  the 
Secretary  of  the  Nogales  Mining  Company  to  enter  on 
the  books  of  the  company  the  resignations  as  Directors 
and  officers  of  said  company  the  names  of  W.  F.  Oheno- 
weth,  H.  K.  Chenoweth  and  Eliza  E.  de  Chenoweth,  said 
resignations  to  date  from  Aprii  9th,  1901. 
Jesse  R.  Grant, 
vv.  F.  Chenoweth. 
H.  K.  Chenoweth.  * 

Eliza  E.  de  Chenoweth. 
Witness:  .   ,j 

Jas.  A.  Cooper. 


vs.   NOGALES  MINING  COMPANY   ET  AL. 


Answer  Without 
Exhibits 


In  the  District  Court  of  the  First  Judicial  District  of 
the  Territory  of  Arizona,  in  and  for  the  County  of  Santa 
€ruz. 

H.  K.  Chenoweth  and  W.  F.  Ghenoweth,  Plaintiffs, 

Nogales  Mining  Company,  a  Corporation,  R.  A.  McPher- 

son,  Ray  Ferguson,  R.  i^.  ojoan,    C.  O.  Richards    and 

Jesse  R.  Grant,  Defenaants, 

Now  come  defendants,  Nogales  Mining  Company,  a  cor- 
poration, Ray  Ferguson  and  C.  O.  Richards,  and  answer- 
ing in  the  above  entitled  action,  allege  as  follows: 

Answering  paragraph  one  of  plaintiffs'  complaint,  ad- 
mit the  truth  thereofs 

Answering  paragraph  two  of  said  complaint,  defenl- 
ants  are  informed  and  believe  and  therefore  allege,  that 
one  Maldonado  and  others,  the  names  of  whom  these  de- 
fendants are  at  present  unaoie  to  ascertain,  were  tne 
owners  of  the  "Zaragoza"  mine  or  mining  claim,  situated 
in  Curcupe,  District  of  Magdalena,  Sonora,  Mexico.  That 


22  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

plaintiffs  did  not  own  said  mining  claim,  as  alleged  in- 
said  complaint,  but  that  cxie  truth  of  the  matter  is,  that 
R.  A.  McPherson  obtained  an  optional  contract  for  the- 
purchase  of  the  said  claim,  and  that  he,  the  said  McPher- 
son, entered  into  an  agreement  with  these  plaintiffs  and 
Jesse  R.  Grant,  agreeing  that  if  they,  the  said  plaintiffs 
and  said  Jesse  R.  Grant  would  assist  him  in 
carrying  out  his  contract  with  the  said  Mal- 
donado  for  the  purchase  of  the  said  mining  claim, 
that  he  would  give  to  each  of  them  a  one-fourth  interest 
in  said  mining  claim. 

That  it  is  true  that  thereafter  the  Nogales  Mining 
Company  was  incorporated  and  that  said  mine  was  con- 
veyed to  said  corporation;  but  that  it  5s  not  true  that 
plaintiffs  thereafter  expended  large  sums  of  money  and 
performed  much  labor  in  the  development  of  said  min-^ 
ing  claim.  The  truth  of  the  mafter  is  that  plaintiffs  never 
did  expend  at  that  time  or  at  any  other  time,  any  sum  of 
money  whatever  or  perform  any  labor  in  the  develop- 
ment of  said  mining  claim,  for  tne  -act  is  that  there  never 
has,  at  any  time,  been  any  work  done  or  labor  performed 
in  the  development  of  tue  said  Zaragoza  mining  claim. 

That  about  the  time  said  Nogales  Mining 
Company  was  organized,  Jesse  R.  Grant  ar- 
ranged with  Charles  B.  Richards  for  forty  tnou 
sand  dollars  to  be  used  in  the  development  of 
said  mining  claim;  that  of  this  amount,  about  ten 
thousand  dollars  was  actually  furnished  to  said  com- 
pany, and  development  was  done  on  what  is  now  the 
Nogales  mining  claim  to  the  extent  of  about  three 
thousand  dollars.  That  defenaants  do  not  know,  and 
therefore  can  not  say  at  .ae  present  time,  what  was  done 
with  the  remainder  of  tne  said  ten  taousand  dollars;  that 


vs.  NOGALES  MINING  COMPANY  ET  AL.  23 

at  the  time  the  said  development  was  done  on  the  saia 
Nogales  mining  ciaim,  as  aforesaid,  defencants  believe 
from  information,  and  therefore  allege  the  fact  to  be, 
that  the  plaintiffs  and  Grant  and  McPherson  honestly 
believed  that  the  Nogales  mining  claim  was  a  part  of  the 
said  Zaragoza  mining  claim;  that  thereafter  plaintiffs 
objected  to  the  arrangement  which  had  been  made  by 
Jesse  R.  Grant  with  Charles  B.  Richards,  as  aforesaid,  for 
the  furnishing  of  the  said  forty  thousand  dollars,  and 
that  the  plaintiffs,  solely  upon  the  credit  of  the  corpora- 
tion, and  not  at  all  upon  their  personal  credit  as  alleged, 
borrowed  the  sum  of  fifty  thousand  dollars  from  Mrs» 
Henrietta  Stuart,  through  her  agent  R.  E.  Doan,  above 
named  defendant;  that  the  said  defendants,  Jesse  R. 
Grant  and  R.  A.  McPherson  agreed  to  this  last  loan,  with 
the  understanding  that  the  said  ten  thousand  dollars 
advanced  by  Charles  B.  Richards,  be  repaid  to  him,  and 
that  thereafter  the  said  Jesse  H.  Grant,  in  order  to  re- 
lease himself  from  the  contract  entered  into  *'ith  tlit; 
said  Charles  B.  Richards,  transferred  to  the  said 
Charles  B.  Richards  one-fourth  of  his,  said  Grant's, 
stock  in  the  Nogales  Mining  Company,  and  did  refund 
and  repay  to  the  said  Charles  B.  Richards  the  said  ten 
thousand  dollars  by  him,  the  said  Richaras,  rurnisaei 
as  above  stated;  that  out  of  the  said  fifty  thousand 
dollars  borrowed  from  the  said  Mrs.  Stuart  by  the 
Nogales  Mining  Company,  the  said  Grant  was  rurnlshea, 
on  March  4th,  1900,  the  said  money  so  repaid  to  the 
said  Charles  B,  Richards;  that  the  said  money  sso 
furnished  appears  to  be  the  first  money  or  the  san'i 
fifty  thousand  dollars  borrowed  from  the  said  Mrs. 
Stuart,  as  shown  on  page  seventeen  of  the  minute  book 
of  the  said   Nogales  Mining  Company.   Further,   it  ap- 


24     PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

pears  from  the  account  of  W.  F.  Chenoweta,  rendfreu 
October  4th,  1900,  that  there  was  twelve  thousand  five 
hundred  aoilars  in  money  raised  by  the  sale  of  stock. 
Defendants  deny  that  during  the  month  of  April,  1901^ 
or  ai  any  time  prior  thereto,  plaintiffs  had  the  largest- 
interest  or"  greatest  investment  in  said  corporation, 
and  allege  that  the  greatest  interest  that  the  plaintiffs 
ever  owned  in  saia  corporation  was  one-half  of  iUe 
stock,  that  being  at  about  the  time  the  company  was 
organised;  that  defendants  are  informed  and  believe  and 
therefore  allege  that  -c  is  noi  true  that  from  time  ta 
time  at  lue  will  of  said  plaintiffs,  shares  of  stock  of 
said  corporation  were  issued  to  different  persons  tc 
secure  their  service  in  assistance  of  the  promotion  of  the 
said  corporation.  Defendants  deny  that  in  ihe  month  of 
April,  1901,  the  total  amount  of  stock  in  said  corporation 
that  had  been  issued  as  shown  by  the  books  of  thr 
company  was  nineteen  thousand  five  hundred  and  nine 
shares,  and  allege  that,  as  shown  by  said  books,  the 
amount  of  stock  so  issued  was  only  eleven  thousand 
eight  hundred  and  forty  shares,  as  iS  snown  by  the 
following  certificates  in  said  stock  book,  towit:  Certifi- 
cate No.  1,  ten  shares;  No.  2,  ten  shares.  No.  3,  ten 
shares;  No.  4,  ten  shares;  No.  5,  thirteen  hundred 
and  ninety  shares;  No.  6,  thirteen  hundred  and  ninety 
shares;  No.  7,  thirteen  hundred  and  ninety  shares;  No  8, 
thirteen  hundred  and  ninety  shares;  No.  9,  cancelled;  No. 
10,  eight  hundred;  No.  11,  cancelled;  No.  12,  fifty  shares; 
No.  13,  fifty  shares;  No.  14,  fifty  shares;  No.  15,  fifty 
shares;  No.  16,  forty  shares;  No.  17,  two  hundred  and  forty 
shares;  No.  18,  three  hundred  and  twenty  shares;  No.  19, 
eleven  hundred  shares;  No.  -20,  ten  hundred  and  fifty 
shares;  No.  21,  four  hundred  shares;   No.  22,  four  hun- 


vs.  NOGALES  MINING  COMPANY  ET  AL.  25 

dred  shares;  No.  23,  one  hundred  and  twenty-five  shares; 
No.  24,  one  hundred  and  twenty-five  shares;  No.  25,  one 
hundred  shares;  Nos.  26,  27,  28,  29  and  30,  not  issued; 
No.  31,  thirteen  hundred  and  forty  shares;  Nos.  32,  :.5, 
34,  35  and  36,  not  issued;  Nos.  37,  38,  39  and  40,  certi- 
ficates taken  from  the  hook  ana  no  notation  or  record  on 
stub,  being  a  total  of  eleven  thousand  eight  hundred 
and  forty  shares  as  above  stated.  It  is  not  true  that  of 
the  shares  issued  up  to  April,  1901,  plaintiffs  jointly  were 
and  still  are  the  owners  of  7,600  shares,  but  the  truth 
of  the  matter  is  that  there  was  issued  to  plaintiffs  prior 
to  April  j-cii,  1901,  three  thousand  eight  hundred  and 
fifty  shares.  On  April  12th,  1901,  plaintiffs  sold  to  Jesse 
R.  Grant,  for  the  consideration  of  five  thousand  dollars, 
all  of  their  stock  except  seven  hundred  shares  out  of  an 
alleged  issue  of  fifty  thousand  shares  (which  were  never 
issued  except  in  part),  which  interest  they  had  previous- 
ly disposed  of.  (Reference  is  hereby  made  to  "Exhibit 
B"  in  plaintiffs'  complaint).  It  is  not  true  that  in  July, 
1900,  plaintiff  W.  F.  Chenoweth  was  elected  manager 
of  said  company  and  was  empowered  and  instructed  to 
conduct  the  development  of  the  claim  belonging  to  the 
said  company  to  erect  the  necessary  buildings,  mill,  ma- 
chinery and  pumping  plant  and  other  improvements 
thereon,  but  the  truth  of  the  matter  is,  that  on  March 
9th,  1900,  W.  P.  Chenoweth  entered  into  a  contract  with 
the  corporation,  for  a  consideration  of  thirty-five  thou- 
sand dollars,  to  construct  a  twenty-stamp  mill,  full  and 
complete  on  the  grouna,  and  in  running  order  and 
first-class  in  every  particular,  including  a  pumping-plant 
and  pipe  line  from  Santo  Domingo  river  sufficient  to  sup- 
ply ample  water  for  said   mill  and   mine.     (A  memor- 


26  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET   AL. 

andum  for  the  contract  more  lully  appears  on  page 
fifteen  in  the  minute  booK  of  tne  Nogales  Mining  Com- 
pany.) It  is  not  true  tnat  W.  F.  Chenov/eth  devoted  his 
entire  time  and  attention  to  the  aevelopment  of  the  said 
mining  claim  untix  April,  1901,  for  the  truth  of  tbe 
matter  is  that  there  never  was,  nor  is  there  now,  any 
development  work  on  the  said  Zaragoza  mining  claim 
owned  by  the  said  corporation  claim;  it  is  not  true  that 
plaintiff,  H.  K.  Chenoweth,  devoted  any  of  his  time 
whatsoever  in  securing  money,  and  it  is  not  true  that 
said  H.  K.  Chenoweth  or  anyone  else  expended  any 
money  whatever  on  sai^  mining  claim  in  its  develop- 
ment, or  in  the  erection  of  a  mill,  pumping  plant  or 
machinery,  for  the  reason,  and  the  truth  of  the  matte? 
is,  that  W.  F.  Chenoweth  nad  prior  to  that  time,  entered 
into  a  contract  with  the  Nogales  Mining  Company,  ai5 
above  stated,  to  erect  a  mill,  pumping  plant  and  ma- 
chinery. It  is  not  true  tnat  in  the  neighborhood  of 
eighty  thousand  doilars  was  spent  for  the  erection  of  a 
mill,  pumping  plant,  machinery  and  other  improve- 
ments, for  the  truth  of  the  matter  is  that  the  erection  of 
the  mill  and  pumping  plant  was  let  by  contract  to  W.  F. 
Chenoweth  as  above  s.atea,  for  thirty  five  thousand  dol- 
lars, and  that  all  .he  other  improvements  would  not 
exceed  in  value  or  cost  of  construction,  five  hundred 
dollars.  It  is  true  there  arose  between  the  plaintiff  and 
other  stockholders  of  said  corporation  a  very  serious 
disagreement  as  to  the  management  of  said  corjyora- 
ation,  as  will  be  more  fully  set  out  hereafter,  but  it  is 
not  true  that  Grant  in  any  way  represented  any  stock- 
holders whatever  except  himself.  I'he  iruth  of  the  mat- 
ter is  that  on  March  2S.^,  1901,  a  majority  of  the  stock- 
holders, through  the  Secretary  of  the  said  corporation, 


vs.  NOGALES   MINING   COMPANY   ET  AL.  27 

called  a  meeting  of  the  stockholders  for  the  purpose  of 
electing  new  Directors  of  the  said  corporation,  and  the 
following  directors  were  elected  on  April  10th,  1901,  to- 
wit:  James  A.  Cooper,  H.  K.  Chenoweth,  R.  A.  Mc- 
X  ..erson,  Ray  Ferguson,  ^..anes  O.  Richards;  and  the 
following  officers  were  elected  at  the  meeting  of  the 
Directors  held  the  same  day,  towit:  James  A.  Cooper, 
President;  H.  K.  Chenoweth,  Vice-President,  Ray  Fergu- 
son, Secretary  ana  Treasurer  anu  Charles  O.  Richards, 
Manager.  It  is  true  that  on  April  12th,  1901,  plaintiffs 
and  defendants,  ^  esse  R.  Grant  ana  James  A.  Cooper,  did 
enter  into  the  said  contact  set  out  in  plaintiffs  "Ex- 
hibit A."  It  is  also  true  that  defendant  Grant  did  enter 
into  the  contract  in  plaintiffs'  complaint  marked  "Ex- 
hibit B;"  but  it  is  not  true  that  relying  upon  the  prom- 
ises made  by  Cooper  and  Grant  in  the  said  agreement 
plaintiffs  resigned  ^.rom  their  offices,  for  the  truth  oi 
the  matter  is  that  at  the  time  said  contract  marked  "Ex- 
hibit B"  was  executed,  H.  K.  Chenoweth  was  the  only 
one  of  these  plaintiffs  wno  was  a  director  in  said  cor- 
poration, and  that  at  che  time  si^.a  contract  marked  "Ex- 
hibit B"  was  executed,  selling  all  the  stock  that  the  said 
plaintiffs  owned  in  the  said  Nogales  Mining  Company, 
then,  at  that  time,  said  H.  x^.  Chenoweth,  being  no 
longer  a  stockholder  in  said  corporation,  did  resign.  It 
is  not  true,  as  plaintiffs  allege,  that  relying  and  be- 
lieving in  good  faith  tnat  defendant  Grant  would  fulfill 
his  promise  to  plaintiffs  and  woula  settle  all  the  o.^.xga- 
tions  of  the  said  company,  and  would  pay  for  plaintiffs' 
interest  as  stipulated  in  said  agreement,  "that  plain- 
tiffs have  fulfilled  every  part  ot  their  agre€ment,"  for 
the  truth  of  the  matter  is,  as  is  shown  in  "Exhibit  B^* 
in  plaintiffs'  complaint  that  the  said  Grant  did  pay  five 


28  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET   AL. 

thousand  dollars  in  cash  for  piaintifcs'  stock;  it  is 
not  a  fact  that  plaintiirs  have  fulfilled  every  part  of 
their  agreement  set  out  in  "Exhibit  A"  in  plaintiffs' 
complaint;  the  >.ruth  of  the  ma..er  is,  that  notwithstand- 
ing the  fact  cxiat  plaintiffs'  contract  and  guarantee  in 
"Exhibit  A,"  referred  to,  that  the  business  of  the  Cerro 
Prieto  Mining  Company  is  not  mortgaged  nor  hypoth- 
ecated nor  transferred  to  any  person  but  is  entirely 
free  from  all  debts  ana  ail  obligations.  The  fact  is  ihat 
long  prior  to  lue  12th  ^ay  of  October,  1901,  that  C. 
Ramirez  had  instituted  suit  in  the  courts  of  Mexico  and 
had  attached  all  the  property  of  .ae  Cerro  Prieto  iVxining 
Company,  ana  that  Mrs.  rlenrietta  Stuart  had  also  enter- 
ed suit  in  the  Mexican  courts  an^  also  had  attached  all 
the  property  of  the  v^erro  Prieio  Mining  Company,  anl 
that  the  Nogales  Mining  Company  had  brougat  suic  in 
the  Mexican  courts  lor  the  consolidation  of  all  the  prop- 
erty of  the  Cerro  Prieto  Mining  v^ompany  witn  t-at  oj^ 
the  Nogales  Mining  Company,  as  will  more  fully  appear 
by  defendants'  "Exhibit  A"  attached  hereto  and  made  a 
part  hereof.  Defendants  allege  that  defendant  urant  ii- 
now  ready  and  has  ai,  all  times  heretofore  oeen  ready 
and  willing  to  pay  to  t.-e  said  plaintiffs  the  said  thirty 
thousand  dollars  mentioned  in  'Exhibit  A"  in  plain- 
tifis  complaint,  and  will  pay  to  said  plaintiffs  the  said 
thirty  thousand  dollars,  as  soon  as  plaintiffs  can  fully 
comply  with  said  contract.  It  is  true  that  at  the  annual 
meeting  of  stockholders  the  above  named  deiendants  in 
this  cause  were  elected  Directors;  but  it  is  not  true  that 
the  defendant  Grant  had  no  intension  of  performing  his 
agreement  in  the  contracts  entered  into  and  had 
conspired  with  other  defendants  to  exclude  plaintiffs 
from  all  the  profits  and  advantages  of  this  corporation, 


V3    NOGALES  MINING  COMPANY  ET  AL  '2& 

:and  that  he  deceived  them  and  got  them  off  the  Board  of 
Directors  to  gain,  with  other  aeiendants,  personal  con- 
trol of  said  corporation  to  wreck  the  corporation  and  to 
become  himself,  with  other  of  said  defendants,  sole 
owners  of  tne  property  of  said  corporations,  for  the 
truth  is  that  defendant  vjrant  entered  into  said  contract 
referred  to  with  a  bona  fide  intention  of  pertorming  his 
agreement,  and  taat  he  is  now  ready  to  pay  the  said 
thirty  thousand  dollars  to  the  said  plaintiffs  as  soon 
as  they  comply  with  their  part  of  said  contract  and  that 
he,  said  Grant,  has  paid  out  auout  twelve  thousand  dol- 
lars of  debts  of  said  corporation,  that  being  all  of  the 
debts  of  the  said  corporation  that  the  company  has  ever 
acknowledgea.  And  in  every  particular,  the  said  defend' 
ant.  Grant,  has  complied  with  said  contract,  and  is  now 
willing,  ready  and  waiting  to  comply  fully  with  his  part. 
It  is  not  true  that  defendant.  Grant,  with  others  of  said 
defendants  tried  in  any  way  to  deceive  plaintiffs  and  get 
them  off  the  Board  of  Directors  or  to  wreck  said  corpora 
tion  and  to  become  himself,  with  others  of  said  defena 
ants,  sole  owners  of  said  corporations.  It  is  not  true 
that  at  the  time  of  tne  election  of  the  defendants  as 
Directors  of  said  corporation,  defendant  R.  E.  Doan 
was  owner  of  2340  shares  of  issued  stock  and  McPiier- 
son  one  share  of  issued  stock,  and  that  Grant  was 
owner  of  1408  shares  of  issued  stock,  for  the  truth  is 
that  Doan  hela  1120  shares,  MePherson  held  ten  shares 
and  Grant  held  5246  shares,  and  that  there  was  rep- 
resented at  said  meeting,  by  proxy  and  in  person,  10,- 
690  shares  out  of  a  totai  of  11,490  issued. 

Answering  j^aragraph  three  of  plaintiffs'  complaint, 
defendants  deny  absolutely  all  of  said  paragraph  in  toto, 
and  state  the  truth  to  be  that  W.  F.  Chenoweth  has  noi. 


30  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

made  an  accounting  to  the  company  as  Manager  of  said 
corporation  since  January  1st,  1901,  although  he  has  been 
requested  in  writing  by  the  Treasurer  of  said  corpora- 
tion, and  verbally,  by  the  manager  of  said  corporation, 
to  render  such  an  accounting.  Defendants  allege  that 
on  January  12th,  1901,  W.  F.  Chenoweth,  Manager  of  said 
corporation,  did  file  a  statement  of  his  account,  purport- 
ing to  be  his  account  from  October  4th,  1900,  to  January 
1st,  1901,  that  said  statement  was  left  in  his,  said  Chenor 
weth's  hands,  he  being  at  that  time  the  custodian  of 
the  books  and  papers  of  che  said  corporation,  lie  being 
the  acting  Secretary  of  said  corporation  in  the  ab- 
sence of  the  Secretary,  and  that  thereafter  and  during 
the  month  of  March,  1901,  the  Secretary  of  the  said  cor- 
poration, Jesse  R.  Grant,  demanded  of  the  said  W.  V. 
Chenoweth  all  the  books  and  papers  of  the  said  cor- 
poration; and  that  the  said  Chenoweth  did  deliver  to  the 
said  Grant  the  minute  book,  the  stock  uook  and  a  few  of 
the  papers,  but  that  the  said  Chenoweth  failed  to  turn 
over  to  the  Secretary  many  of  the  most  important  papers 
of  the  said  corporation,  among  them  being  this  alleged 
account  rendered  on  January  12th,  1901.  The  only  two 
accounts  of  the  said  Chenoweth  that  were  ever  de- 
livered to  the  Secretary,  or  that  have  since  been  re- 
ceived from  said  Chenoweth  by  the  said  Secretary, 
(copies  of  which  said  accounts  are  hereto  attached  and 
marked  "B"  and  •C"  ana  made  a  part  of  this  answer) 
are  indefinite,  unintelligible  and  totally  insuflacient,  and 
do  not  show  where  or  for  what  purpose  the  company's 
money  was  spent. 

It  is  not  true  that  said  corporation  is  in- 
debted to  plaintiff  W.  F.  Chenoweth,  in  the  sum  of  $3,- 
833.35,  or  in  any  other  sum  wnatever;  but  the  truth  of 


vs.  NOQALES  MINING  COMPANY  ET  AL.  31 

the  matter  is  that  we  are  informed  ana  oeileve  that  the 
•said  plaintiff,  \v.  F.  Chenowem,  is  indeMea  to  the  cor- 
poration in  a  large  sum,  the  exaei  amount  of  wnich,  de- 
lendants  can  not  at  tnis  time,  state,  but  that  the  de- 
fendant, the  Nogales  Mining  Company,  has  instituted  a 
suit  in  the  District  Court  of  the  First  Judicial  District  of 
the  Territory  of  Arizona,  at  Nogales,  in  Santa  Cruz  coun- 
ty, praying  an  accounting  of  the  said  W.  F.  Chenoweth 
(a  copy  of  which  said  complaint  is  marked  "Exhibit 
D,"  attached  hereto  and  made  a  part  hereof);  and  that 
these  defendants  stancl  ready  and  willing  to  pay  the 
said  plaintiff  any  and  all  monies  due  him  at  any  time  the 
said  plaintiff  renders  a  lair  and  clear  account,  together 
with  vouchers  covering  all  the  expeditures  of  money 
placed  in  his  hands  as  an  officer  of  said  corporation,  if 
such  account  shows  said  corporation  is  indebted  lo 
said  plaintiff. 

Answering  paragraph  four  of  said  complaint,  defemi- 
ants  admit  that  Henrietta  Stuart  holds  notes  of  said  cor- 
poration aggregating  sixty-three  thousand  five  hundred 
dollars,  and  mat  C.  Ramirez  holds  a  note  purporting  to 
be  of  the  Nogales  Mining  Company  for  five  thousand 
dollars;  defendant  denies  that  the  said  corporation  owes 
W.  F.  Chenoweth  any  sum  whatever.  Defendants  admit 
that  the  said  corporation  was  indebted  in  small  amounts 
contracted  under  the  management  of  plaintiff,  W.  r . 
Chenoweth,  for  labor,  supplies  and  borrowed  money,  ag- 
gregating some  twelve  thousand  dollars;  which  said  in- 
debtedness has  been  fuily  paid  off  and  satisfied.  Defend- 
ants admit  that  there  has  been  partly  erected  and  part- 
ly equipped  a  twenty-stamp  mill  and  pumping  plant  un- 
der a  contract  of  thirty-five  thousand  dollars,  herein- 
before referred  to;  but  that  all  other  improvements,  in 


32  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL.   » 

the  way  of  buildings,  and  mining  implemenLS  owned  oy 
the  said  corporation  did  not  exceed  in  value  one  tnou- 
sand  dollars  at  the  ame  said  plaintiff  relinquished  th3 
management  of  said  corporation.  Defendants  deny  ...at 
if  said  Zaragoza  mining  claim  is  properly  developed  it 
is  of  ample  value  to  pay  all  indebtedness  of  said  cor- 
poration, and  state  the  truth  to  be  that  the  said  Zaragoza 
mining  claim  is  absolutely  valueless  as  a  mining  ciaim, 
as  will  De  more  fully  set  out  hereafter.  Defendants  deny 
that  the  directors  of  said  corporation  have  rrauaulently 
conspired  to  freeze  out  plaintiffs  from  all  the  benefits 
of  the  said  corporation,  and  that  the  defendants  used  the 
contract  described  herein  to  obtain  control  of  sa^-  cor- 
poration and  ils  property  in  bad  faicn;  but  the  truth  of 
the  matter  is  that  the  present  management  was  m  con- 
trol of  the  corporation  before  the  execution  of  the  said 
contract;  an^  the  said  contract  was  executed  with  a 
bona  fide  anu  honest  intention  as  above  stateG.  T3e- 
fendants  deny  that  they  intenaed  or  now  intend  the 
destruction  Oi.  the  said  corporation  or  to  cause  the  sale 
to  themselves  or  to  a  corporation  organized  by  them 
selves  of  any  of  the  property  of  said  corporation,  and 
deny  that  they  procured  Henrietta  Stuart  to  institute  an 
attachment  suit  in  the  courts  of  Mexico  and  levy  an  at- 
tachment upon  the  property  of  the  said  corporation,  and 
state  the  truth  to  be  mat  tne  defendants  have  done  and 
are  doing  everything  in  their  power  to  pay  off  all  l\>3 
debts  of  the  said  corporation  and  to  protect  all  the  stock- 
holders of  said  corporation,  and  that  the  defendant,  No- 
gales  Mining  Company,  is  vigorously  defending  the  at- 
tachment suit  ot  Henrietta  Stuart  in  the  Mexican  courts. 
Defendants  deny  that  they  mortgaged  all  the  property 
to  defendant,  CO.  Richards,  for  the  purpose  of  having 


vs.  NOG  ALES  MINING  COMPANY  ET  AL.  33 

the  same  foreclosed,  but  the  purposes  of  the  same  will 
be  more  fully  explained  hereafter.  Defendants  allege 
that  the  by  laws  of  the  Nogales  Mining  company,  adopt- 
ed at  the  last  annual  meeting,  do  provide  for  special 
meetings  of  the  stockholders  Oj.  the  said  corporation 
and  for  the  election  of  Boards  of  Directors.  Defendants 
deny  that  they  are  arranging  to  transfer  by  deed  or 
otherwise  any  of  the  properties  of  said  corporation  to 
a  new  corporacion  or  to  anyone  else  whomsoever;  but 
that  the  defendants  are  doing,  as  above  stated,  every- 
thing in  their  power  to  pay  the  debts  and  to  protect  the 
stockholders  of  said  corporation.  Defendants  deny  that 
the  plaintiffs  represent,  in  their  application  herein  made, 
a  majority  of  the  stockholders  of  the  said  corporation, 
or  any  of  the  stockholders  whomsoever;  and  allege 
that  under  the  by  laws  of  the  said  corporation  a  meet- 
ing of  the  stockholders  could  legally  be  held  upon  fif- 
teen days'  notice  and  a  new  Board  of  Directors  legally 
elected,  and  that  the  said  directors  and  defendants  stanu 
ready  and  willing  at  any  time  to  call  a  meeting  of  the 
stockholders  of  said  corporation  for  the  election  of  a 
new  Board  of  Directors  whenever  application  is  made  to 
Lhem  by  a  stockholder  or  stockholders  owning  one- 
fourth  of   .-e  stock  of  said   corporation. 

In  answer  to  paragraph  five  of  said  complaint,  defen- 
dants deny  the  same  in  toto. 

The  defendants  allege  the  truth  concerning  the  No- 
gales  Mining  Company,  that  actions  of  the  plaintiffs 
while  they  were  directors  and  managers  of  the  said  cor- 
poration and  since,  and  the  actions  of  the  present  Board 
of  Directors  since  they  have  had  charge,  to  be  as  fol- 
lows: 

That  pnor  to  the  organization  of  the  Nogales  Mining 


34  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

Company,  during  the  month  or  July,  1899,  Jesse  R.  Grant 
being  then  one  of  the  owners  of  the  Zaragoza  mine, 
or  having  an  interest  in  the  bond  or  optional  contract 
held  by  McPherson,  for  himself  and  on  behalf  of  the  two 
plaintiffs  in  this  case  ana  R.  A.  McPherson,  entered  into 
a  contract  with  Charles  B.  Richards,  the  exact  terms 
of  which  said  contract  these  defendants  do  not  know, 
further  than  that  the  said  contract  was  for  the  purpose 
of  raising  money  to  develop  the  Zaragoza  mine  and  to 
build  a  mill.  The  said  Charles  B.  Richards  was  to  fur- 
nish the  then  co-partnership  forty  thousand  dollars  and 
was  to  have  a  controlling  interest  in  a,  corporation 
thereafter  to  be  formed  for  the  purpose  of  owning  and 
working  the  Zaragoza  mine;  and  relying  upon  the  said 
contract,  he  sent  his  expert,  C.  O.  Richards,  to  Mexico, 
to  examine  the  property  of  the  said  plaintiffs  and  J.  R. 
Grant  ana  R.  A.  McPherson,  and  the  said  C.  O.  Richards 
was  shown  the  Zaragoza  and  what  is  now  the  Nogales, 
the  Grant  and  the  Cerro  Prieto  mining  claims,  as  being 
the  property  owned  by  the  said  plaintiffs  and  Grant  and 
McPherson.  That  on  the  favorable  report  made  by  C. 
O.  Richards,  sums  of  money  were  advanced  by  the  said 
Charles  B.  Richards  to  the  amount  of  about  ten  thou 
sand  dollars.  That  on  August  3rd,  1899,  the  Nogales 
Mining  Oompany  was  organiz^v-  by  Jesse  R.  Grant,  H. 
K.  Chenoweth  and  A.  Hampton  in  Nogales,  Arizona.  The 
said  corporation  acquired  tne  ownership  of  the  Zaragoza 
mine  by  deed  from  McPherson.  That  these  plaintiffs, 
for  some  reason  unknown  to  these  defendants,  did  not 
desire  to  carry  out  their  contract  made  with  Charles  B. 
Richards,  and  entered  into  negotiations  with  Mrs.  Hen- 
rietta Stuart  of  Washington,  D.  C,  for  the  loan  of  mon- 
ey; and  that  during  the  month  or  January,  1900,  Dr.  C. 


V?.  NOGALES  MINING   COMPANY  ET  AL.  35 

"Whitehead,  United  States  chemist  and  assayer,  examined 
the  property  of  the  Nogales  Mining  Compapy  and  was 
shown  the  Zaragoza,  Nogales,  Grant  and  Cerro  Prieto 
claims,  aind  it  was  represented  to  him  by  the  corporation 
or  by  directors  or  agents,  that  tihese  claims  were  owned 
by  the  Nogales  Mining  Company.  That  upon  his  exam- 
ination,  Mrs.  Henrietta  Stuart,  through  her  agent,  R. 
E.  Doan,  agreed  to  loan  the  corporation  the  sum  of  fif- 
ty thousand  dollars;  but  the  said  fifty  thousand  dollars 
was  not  paid  over  until  Major  James  A.  Cooper,  who 
wap  sent  by  Mrs.  Stuart  to  examine  the  property  of  thb 
Nogales  Mining  Company.  That  when  Major  Cooper 
went  to  examine  the  property  he  was  shown  by  tlhe 
plaintiffs  in  this  action,  the  Zaragoza,  the  Nogales,  the 
Grant  and  the  Cerro  Prieto  mines,  and  it  was  represent- 
ed to  him  that  the  Nogales  Mining  Company  was  owner 
of  all  the  above  mentioned  claims  and  upon  his  favor- 
able report  the  money  was  aid  over  to  the  Nogales 
Mining  Company. 

On  the  12th  day  of  January,  1900,  W.  F.  Chenoweth, 
H.  K.  Chenoweth,  Jesse  R.  Grant  ana  R.  A.  McPherson 
organized  a  corporation  called  the  Cerro  Prieto  Mining 
Company,  under  the  laws  of  Mexico,  in  Nogales,  Sonora, 
Mexico.  Thereafter,  on  or  about  Marcb  12th,  1900,  Jesse 
R.  Grant  transferred  to  the  Cerro  Prieto  Mining  Com- 
pany the  Nogales  and  Cerro  -  rieto  mines,  in  considera- 
tion of  twenty-five  shares  of  stock,  said  stock  bein^' 
one-fourth  or  the  capital  stock  ot  the  said  Cerro  Prieto 
Mining  Company,  and  H.  K.  Chenoweth  aeeded  to  said 
Mexican  corporation  the  Grant  and  Elisa  claims,  and 
received  in  consideration  therefor,  twenty-flve  shares 
of  stock  of  the  said  Mexican  corporation.  ^.  F.  Cheno- 
weth  ana   R.   x^.   Mcir'herson   each   received   twenty-five 


36  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

shares  of  the  stock  of  said  corporation,  for  which  they 
are  supposed  lo  ^-ave  paid  twenty-five  hundred  Mexican 
dollars,  each. 

1  ixese  defendaints  are  informed  and  believe  and  there 
fore  allege  the  fact  to  be, -that  the  plaintiffs  m  tins  ac- 
tion did  honestly  believe  that  the  ground  that  was 
shown  Mr.  Richards  and  Mr.  Whitehead  actually  belong- 
ed to  the  Nogales  Mining  Company.  That  all  the  devel- 
opment work  done  up  to  January  1st,  1900,  was  done 
on  ground  whicn  is  now  the  Nogales  claim  and  outside 
the  boundaries  of  t.-e  /jaragoza  claim.  That  during 
the  month  of  January,  1900,  a  re-survey  of  the  Nogales 
Mining  Company's  property  was  made,  and  it  was  as- 
certained by  that  re-survey  that  the  Zaragoza  mining 
claim  did  not  cover  the  ledge  and  that  there  was  practi- 
cally no  available  ore  on  the  Zaragoza  claim.  That  there- 
after, on  January,  ,2nv.,  1900,  Jesse  R.  Grant  denounced 
the  Nogales  claim,  and  on  January  11th,  1900,  the  Cerro 
Prieto  claim.  That  on  January  19th,  1900,  H.  K.  Uxieno- 
weth  aenounced  the  "Elisa"  claim,  and  on  January  20th, 
1900,  the  "Grant"  claim,  all  of  which  said  above  mention- 
ed Claims  have  since  been  conveyed  to  tihe  Cerro  Prieto 
Mining  Company.  These  defendants  are  informed  and 
believe  and  therefore  allege  the  fact  to  be  that  the  cost 
of  txie  denouncement  of  the  "Nogales",  the  "Graot", 
the  "Cerro  Prieto"  and  the  "Elisa"  mining  claims,  that 
the  cost  or  the  survey  of  the  said  mining  claims,  ti^at 
the  money  expended  in  procuring  the  patents  for  these 
said  mining  claims,  that  the  money  expended  for  the  or- 
ganization of  the  Cerro  Prieto  Mining  Company  and  that 
all  of  the  development  work  done  on  these  mining 
claims  was  paid  for  by  the  Nogales  Mining  Company 
while  these  said  plaintiffs  were  managers  and  directors 


vs.   NOG  ALES  MINING   COMPANY  ET  AL.  37 

tliereof.  That  the  mill  and  pumping  plant  were  erected 
by  these  plaintiffs  while  they  were  directors  and  had 
control  of  the  Nogales  Mining  Company,  and  with  the 
Nogales  Mining  company's  money,  for  the  express  pur- 
pose of  working  the  ores  of  the  Cerro  Prieto  Mining 
Company,  and  these  defenuants  are  informea  and  T3e- 
lieve,  and  therefore  allege  the  fact  to  be  that  the  object 
of  these  plaintifte  in  bringing  this  suit  and  asking  for 
a  receiver,  is  tor  the  sole  purpose  of  having  the  proper- 
ty of  the  Nogales  Mining  Company  sold  at  public  sale 
at  a  sacrifice,  and  boughi  in  by  the  Cerro  Prieto  Mining 
Company.  That  the  note  alleged  to  have  been  given  by 
the  Nogales  Mining  Company  to  C.  Ramirez  was  for  the 
purchase  of  an  alleged  mining  claim  called  the 
"Ocampo",  which  said  aueged  mining  claim  was  deedeij 
to  W.  F.  Chenoweth,  personally,  and  does  not  cover  any 
part  of  the  Zaragoza  claim,  but  as  shown  upon  the  map 
marked  "Exhibit  E"  and  attached  hereto,  covers  the  No- 
gales, the  "Grant  ana  part  o^  the  "Cerro  Prieto" 
claims.  , 

These  defendants  are  informed  and  believe,  and 
therefore  allege  the  fact  to  be  that  a  cash  payment  wia& 
made  to  C.  Ramirez  by  these  plaintiffs  out  of  the  Noga- 
les Mining  Company's  money,  the  amount  of  which  these 
defendants  are  unable  to  state,  but  believe  it  cO  be  either 
$500.00  or  $1000.0w.  These  defendants  are  informed 
and  believe  and  therefore  allege  the  fact  to  be  that  dur 
ing  the  time  that  the  plaintiffs  in  this  case  were  mana- 
gers and  directors  of  the  Nogales  Mining  Company,  and 
during  the  time  they  run  the  mill  heretofore  referred  to, 
they  went  in  debt  at  the  rate  of  two  thousand  dollars  per 
month.  That  jUst  prior  to  January  12th,  1901,  and  while 
the  said  Nogales  Mining  company  was  still  being  man 


I 


38  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL, 

aged  by  the  plaintiffs  in  this  action,  the  said  company 
became  unable  to  pay  its  running  expenses, '  and  very 
much  embarrassed  financially;  and  for  the  purpose  of 
raising  funds  to  meet  the  current  indebtedness  and  to 
continue  the  work  of  the  Nogal«s  Mining  Company  a 
meeting  of  all  the  stockholders  was  held  in  Nogales, 
Arizona,  on  January  lz.th,  1901,  at  which  said  meeting 
all  the  stockholders  of  the  Cerro  Prieto  Company  were 
present,  together  with  those  of  the  Nogales  Mining  Com- 
pany. At  this  meeting  a  contract  was  entered  into 
between  the  Nogales  Mining  Company  and  all  the  stock- 
holders of  tJhe  Cerro  Prieto  Mining  Company,  the  effect 
of  which  said  agreement  was,  that  in  consideration  of 
twenty-one  thousand  shares  of  the  stock  of  the  Nogales 
Mining  oompany,  tne  siock  holders  of  the  Oerro  Prieto 
Mining  Company  agreed  and  obligated  themselves  to 
deed  to  me  Nogales  Mining  Company  ail  the  property 
of  the  v^erro  Prieto  Mining  Company.  That  upon  the 
faith  of  thiS  contraci  the  Nogales  Mining  Company  pro- 
cured another  loan  of  $8,500.00  from  Mrs.  Henrietta 
Stuart.  That  at  this  said  meeting  the  plaintiff,  W.  F. 
Chenoweth  represented  and  stated  to  -the  stockhold,.rs 
of  the  Nogales  Mining  Company  that  tlie  mill  or  the 
said  Nogales  Mining  Company  was  running,  and  t'jat 
there  were  large  bodies  of  ore  on  the  Cerro  Prieto  Min- 
ing Company's  property,  and  that  with  the  $8,500.00  to 
pay  off  the  pressing  bills  of  the  Nogvi.Ies  Mining  Com- 
pany, that  the  said  Nogales  Mining  Company  would 
not  need  any  further  loan  and  wou.d  be  self-sustaining 
and  become  a  paying  proposition.  That  notwithstanuint; 
this  statement,  on  April  12,  1901,  aft^r  these  plalntifts 
had  been  in  full  charge  of  all  the  property  of  the  Noga- 
les Mining  Company  for  three  months,  and  after  having 


vs.  NOGALES  MINING  COMPANY  ET  AL.  39 

Tun  the  mill  for  that  time,  and  after  ha;  ing  receivea 
the  said  loan  of  $8,500.00,  said  No^ales  Mining  Company 
was  in  a  worse  condition  than  on  January  12th,  190L 
That  the  contract  above  referred  to,  executed  by  the 
stockholders  of  the  Cerro  Prieto  Mining  Company  was 
never  turned  over  to  the  N^gales  Mining  Company  by 
the  plaintiff,  W.  F.  Cheno^eth,  who  was  manager  ana 
acting  Secretary  of  said  Nogales  Mining  Company,  un- 
til April  12,  19D1,  ana  that  these  defendants  are  informed 
and  believe,  and  allege  the  fact  to  be  that  the  said  con- 
tract is  now  in  the  hands  of  the  plaintiffs,  W.  P.  Cheno- 
weth.  Defendants  are  reliably  informed  and  believed  and 
therefore  state  the  fact  to  be,  that  Jesse  R.  Grant  and  R. 
A.  McPherson,  two  of  me  stockholders,  and  who  own 
one-half  of  the  stock  of  the  Cerro  Prieto  Mining  Compa- 
ny, are  willing  and  ready  to  fulfill  their  agreement  re- 
ferred to ;  that  is  to  say,  to  transfer  to  the  Nogales  Min- 
ing Company  au  their  interest  and  stock  in  the  Cerro 
Prieto  ivxining  Company,  and  that  it  is  within  the  power 
of  the  plaintiffs  in  this  action,  who  own  the  other  half 
of  the  stock  of  the  said  Cerro  Prieto  Mining  Company 
to  fulfill  their  part  of  the  above  said  contract  by  deeding 
their  interest  in  the  sa-a  company,  and  to  transfer  their 
stock  in  said  company  to  the  iNOgales  Mining  Company, 
but  for  some  reason,  unknown  to  these  defendants,  they 
refuse  so  to"  do,  although  the  said  Nogales  Mining  Com- 
pany are  ready  and  wining  to  tully  carry  out  its  part 
of  said  contract 

That  on  April  12th,  1901.  C.  O.  Richards  took  posses- 
sion of  the  property  of  the  Nogales  Mining  Company 
as  Manager,  and  made  a  report  a  short  time  thereafter 
to  the  stockholders  of  the  said  company  showing  the 
condition  of  the  company's  property,  a  verified  copy  of 


40  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

which  said  report  is  attached  hereto,  marked  "Exhib't 
F"  and  made  a  part  hereof;  that  as  shown  by  said  re- 
port, it  was  absolutely  necessary  to  borrow  money  to 
put  the  mill  and  mine  in  working  condition;  that  a. 
mortgage  was  executed  by  the  Nogales  Mining  Company 
to  C,  O.  Richards,  and  the  said  C.  O.  Richards  loaned  to 
the  company  the  sum  of  $15,000,00. 

That  a  short  time  thereafter  C.  Ramirez  entered  suit 
in  the  Mexican  courts  on  the  note  above  referred  to  aua 
attached  the  property  of  the  Nogales  and  the  Cerro 
Prieto  Mining  Companies;  that  immediately  following 
this  attachment,  Mrs.  Henrietta  Stuart  brought  suit  in 
the  Mexican  courts  and  attached  all  the  property  of  the 
Nogales  and  Cerro  ir'rieto  Mining  Companies;  that  both 
of  the  above  said  attachment  suits  are  being  defended 
by  the  Nogales  Mining  Company,  in  order  to  protect  the 
Nogales  Mining  Company  and  in  order  to  keep  the  mill 
running  and  to  enable  the  Nogales  Mining  Company 
to  pay  off  its  debts;  and  in  order  to  block  said  attacn 
ment  suits  and  for  no  other  purpose  whatever,  C.  O. 
Richards  brought  suit  in  the  Mexican  couris  to  rore 
close  his  said  mortgage  on  the  property  of  the  Nogalea 
Mining  Company;  that  said  foreclosure  suit  is  not  being 
prosecuted  at  the  present  time  but  is  being  permitted  t-^ 
drag  for  the  sole  purpose  of  holding  off  the  attaching 
creditors,  and  to  keep  the  mill  running  as  above  stated, 
and  to  enable  the  Nogales  Mining  Company  to  pay  off 
the  above  said  creditors. 

That  on  the  5th  day  of  October,  1901,  the  Nogales  Min- 
ing Company  brought  suit  in  the  Mexican  courts  for 
specific  performance  of  the  contract  above  referrcMi  to, 
executed  by  the  stockholders  oi  ine  Cerro  Prieto  Mining 
Company   on   January   12th,   1901,   a   copy   of   the   com- 


vs.  NOG  ALES  MINING  COMPANY  ET  AL.  41 

plaint  of  which  said  suit  is  marked  "Exhibit  A,"  at- 
tached hereto  and  made  a  part  hereof.  That  this  said 
suit  is  being  vigorously  defended  by  the  plaintiffs  in 
this  case. 

Tbat  the  present  condition  of  the  Nogaies  Mining 
Company  is  not  such  as  is  represented  by  the  plaintiffs 
in  this  action,  but  in  truth  and  in  fact  is  as  follows:  \.\\l' 
Zaragoza  mining  claim  has  no  available  ore  upon  it  so 
far  as  known;  the  mill,  pumping  plant  and  tools  belong- 
ing to  the  said  Nogaies  Mining  Company,  if  sold,  would 
not  bring  to  exceed  $10,000,  nor  would  they  be  worth  to 
exceed  $10,000  to  anyone  except  the  Cerro  Prieto 
Mining  Company.  The  mill  and  pumping  plant  of  the 
Nogaies  Mining  Company  has  been  lately  over- 
hauled and  rebuilt  at  an  expense  of  ten  thou- 
sand dollars,  and  is  now  in  good  condition  and 
running  on  the  ores  extracted  from  the  Cerro 
Prieto  Mining  Company's  mines;  and  if  the  con- 
solidation suit  above  referrea  to  can  be  successfully  car- 
ried through  by  the  Nogaies  Mining  Company,  or  if 
these  two  plaintiffs  will  deed  their  interest  or  transfer 
their  stock  in  the  Cerro  Prieto  Mining  Company  to  th« 
Nogaies  Mining  Company  as  they  agreed  to  do  in  their 
contract  above  referred  to,  executed  on  January  12th, 
1^01,  the  property  of  the  Nogaies  Mining  Compaiiy 
would  then  be  very  valuable  and  ample  to  pay  all  its 
debts,  and  all  of  the  debts  of  the  Nogaies  Mining  Com- 
pany could  then  be  arranged  for  and  the  company  would 
make  at  least  three  thousand  dollars  per  month,  clear 
of  all  expenses.  The  only  debts  of  any  consequence  ow^ 
ing  by  the  said  Nogaies  Mining  Company  are  those  of 
Mrs.  Henrietta  Stuart  and  C.  O.  Richards,  and  these  de- 
fendants are  informed  and  believed  and  therefore  state 


42  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

the  fact  to  be  that  the  only  reason  Mrs.  Henrietta  Stuait 
brought  her  attachment  suit  above  referred  to,  is  on  ac- 
count of  these  two  plaintiffs  in  this  case  failing  and  re- 
fusing to  fulfill  the  obligations  of  their  contract  of  Jan 
uary  12th,  1901,  above  referred  to. 

Wherefore,  These  defendants  pray  that  the  bill  of 
plaintiffs  be  aismissed;  that  these  defendants  be  per- 
mitted to  continue  in  control  of  the  Nogales  Mining 
Company;  that  the  plaintiffs  in  this  case  be  ordered 
by  this  court  to  transfer  and  deliver  all  of  their  stock 
in  the  Cerro  Prieto  Mining  Company  to  the  Nogales  Min 
ing  Company,  and  for  general  and  special  relief,  these 
defendants  will  ever  pray. 

DUFFY  &  RICHARDSON, 
Attorneys  for  Defendants. 

C.  O.  Richards  being  first  duly  sworn  deposes  and  says, 
that  he  is  one  of  the  defendants  in  the  above  entitl3d 
cause;  that  he  has  read  the  foregoing  complaint  and 
knows  the  contents  thereof,  and  that  tlie  same  Is  trut: 
of  his  own  knowledge,  except  the  matters  therein  stated 
on  information  and  belief,  and  that  as  to  those  matters 
he  believes  it  to  be  true. 

C.  O.  RICHARDS. 

Subscribed  and  sworn  to  before  me  this  21st  day  of 
October,  A.  D.,  1901. 

(Seal)  F.  J.   DUFFY,   Notary  Public. 

Territory  of  Arizona,      } 
County  of  Santa  Cruz.  )"^^' 

Ray  Ferguson  being  ...^ly  sworn  deposes  and  says: 
that  he  is  one  of  the  defendants  in  the  above  entitled 
cause;  that  he  nas  read  the  foregoing  complaint,  and 
knows  the  contents  thereof,  and  that  the  same  is  true 


vs.  NOGALES  MINING  COMPANY  ET  AL.  43 

of  his  own  knowledge,  except  the  matters  therein  stated 
on  information  and  bc.^e.,  and  that  as  to  those  matters  he 
believes  it  to  be  true. 

RAY  FERGUSON. 

Subscribed  and  sworn  to  before  me  this  21st  day  of 
October,  A.  D.,  loux. 

(Seal)  F.  J.  DUFFY,  Notary  Public. 

In  the  District  Court  of  the  First  Judicial  District  of 
the  Territory  of  Arizona,  in  and  for  the  County  of  Santa 
Cruz. 


44  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 


Cross-Complaint  With 
Exhibit 


H.  K.  Chenoweth  and  W.  F.  Chenoweth,  plaintiffs, 

vs. 
Nogales  Mining  Company,  a  coporation,  R.  A.  McPher- 

son,  R.  E.  ^oan,  C.  O.  Ricliards,  and  Jesse  R.  Grant, 

defendants. 

No.  120. 

Now  come  tlie  defendants  in  said  cause,  and  reiterat- 
ing and  reaffirming  all  of  the  matters  alleged  and  set 
forth  in  the  answer  heretofore  filed  by  these  defendants, 
and  allege  as  a  cross-complaint  herein  in  addition  to  the 
allegations  aforesaid  in  said  answer  and  supplementing 
the  same,  that  the  said  plaintiffs  after  they  had  convey- 
ed or  caused  to  be  conveyed  to  the  Nogales  Mining  Com- 
pany the  mine  known  and  described  as  the  "Zaragoza" 
mine,  they  caused  the  boundaries  of  the  same  to  be 
changed  and  altered.  That  when  the  same  was  located 
and  monumented,  it  was  so  located  and  monumented 
that  the  ledge  and  lode  bearing  valuable  minerals  ran 
along  the  center  of  the  claim.  That  the  same  was  lo- 
■  cated  as  a  parallelogram,  and  the  said  lode  bearing  valu- 
able mineral  ran  along  about  half  way  between  the  two 
longest  sides  of  the  parallelogram    for  a    distance    of 


vs.  NOGALES  MINING  COMPANY  ET  AL.  45 

about  500  meters,  and  the  said  defendant  company  was:- 
Organized  for  the  purpose  of  the  development  of  the  said 
mineral  bearing  lode  or  ledge  and  operating  same  as  a 
mine,  and  as  set  forth  in  said  answer  more  fully,  to  all 
of  the  said  parties,  the  agents  of  the  said  Mrs.  Stuart 
and  the  said  defendant  Richards,  and  his  attorney  and 
experts,  the  said  plaintiff  exhibited  and  ^owed  that  the 
ground  owned  by  said  oefendant  company  was  ground 
that  included  the  said  mineral  bearing  lode  or  ledge  for 
ihe  said  distance  of  500  meters,  and  all  of  said  defen- 
dants-parties who  invested  in  the  stock  of  the  said  de- 
fendant company,  and  who  loaned  money  to  the  said  de- 
fendant company,  were  made  by  the  said  plaintiff  to  be- 
lieve, and  they  did  believe  by  reason  of  tlie  fact  that  the 
said  plaintiff  showed  the  boundaries  upon  the  ground 
of  the  said  claim  to  be  such  as  to  include  the  said  500 
meters  of  the  said  mineral  bearing  lode  or  ledge,  and 
that  all  of  the  transactions  of  the  said  parties  were 
based  upon  the  understanding  that  the  said  claim  in- 
cluded the  said  ledge  for  the  said  500  meters  Dased  upon 
the  statements  and  shown  upon  the  ground  of  the 
boundaries  thereof  by  the  plaintiff.  And  defendants  did 
not  know  of  the  existence  of  any  contending  or  con- 
testing claim  against  said  500  meters  of  the  said  min- 
eral bearing  ledge,  and  defendants  allege  that  as  a  mat- 
ter of  fact  there  was  no  contending  claim  or  asserted 
claim  to  any  part  of  the  said  500  meters  of  the  said  ledge, 
so  within  the  boundaries  of  the  said  Zaragoza  claim. 

Defendants  allege  that  afterwards  with  intent  and  for 
the  purpose  of  defrauding  the  said  defendant  company, 
and  the  said  Mrs.  Stuart,  and  the  other  investors  in  the 
stock  of  the  said  company,  and  to  deprive  the  said  de- 
fendant company  of  the  ownership  of  the  said  500  meters 


46  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL, 

Of  the  said  mineral  bearing  ledge,  claimed  and  pretended 
that  the  said  Zaragoza  claim  swung  so  that  it  bore  to  an 
angle  accross  the  said  mineral  bearing  ledge  ana  left 
only  500  meters  of  the  said  mineral  bearing  ledge  crossing 
the  corner  of  the  said  Zaragoza  claim  diagonally,  as 
more  fully  will  appear  by  the  map  attached  to  this  an- 
swer herein  filed  by  defendants.  And  afterwards  for  tho 
purpose  of  defrauding  the  said  defendant  company,  the> 
made  denouncement  under  the  laws  of  Mexico,  or  what 
they  called  the  Nogales  claim,  across  which  the  saia. 
Nogales  claim  the  said  mineral  bearing  ledge  has  its 
strike,  and  the  Grant  claim  to  be  denounced  as  afore- 
said, and  the  Cerro  Prieto  claim  to  be  denounced  as 
aforesaid,  along  the  middle  line  on  which  the  said  min- 
eral bearing  lode  has  its  strike.  And  they  also  caused  to 
be  denounced  Elisa  claims  as  aforesaid,  across  which  the 
said  mineral  bearing  vein  has  its  strike  as  well.  The  ef- 
fect of  which  denouncements  was  if  valid  to  destroy  the 
value  of  the  Zaragoza  Mining  Claim,  ana  to  deprive  said 
defendant  company  of  all  of  its  valuable  mineral 
bearing  ground. 

Having  made  this  denouncement  as  set  forth  to  de- 
fraud said  defendant  company,  they  organized  a  corpora- 
tion under  the  laws  of  Mexico  as  set  out  in  said  answer, 
all  of  the  stock  of  which  was  owned  by  the  plaintiffs  and 
Jesse  R.  Grant  and  R.  A.  McPherson,  as  alleged  in  said 
answer,  whereby  and  by  means  whereof  the  said  plain- 
tiffs intended  to  defraud  and  deprive  said  defendant 
company  of  its  valuable  mining  ground,  and  to  secure 
same  for  themselves,  by  virtue  of  said  denouncement,  iii 
the  said  Mexican  company  organized  as  aforesaid.  That 
when  said  alleged  fraud  was  discovered  by  the  parties 
hereto,  a  contract  was  entered  into  of  the  uate  of  the 


vs.   NOGALES   MINING   COMPANY  ET  AL.  47 

12th  of  January,  1901,  which  is  set  forth  in  the  answer 
hereto,  hy  means  of  whicTi  it  was  agreed  by  all  of  the 
stockholders  of  the  said  Mexican  company  that  they 
would  right  the  wrong  and  prevent  the  execution  of  the 
fraud  as  against  defendants  nerein,  by  causing  to  be  con- 
veyed to  this  defendant  company  the  said  denounced 
mining  claims  as  aforesaid.  They  allege  that  the  said 
contract  has  not  been  executed,  although  they  allege 
that  the  said  Jesse  R.  Grant  and  the  said  R.  A.  Mc- 
Pherson  as  aforesaid,  are  ready  and  willing  to  assign 
and  transfer  to  said  defendant  company  one-half  of  tlie 
stock  of  the  said  Mexican  company  as  provided  for  in 
said  contract,  but  they  allege  that  the  said  plaintiffs,  who 
are  the  owners  of  half  of  the  stock  have  failed  and 
refused  and ^ still  fail  and  refuse  to  transfer  to  the  said 
defendant  company  the  same  or  any  part  thereof.  And 
defendants  allege  that  it  is  now  and  has  been  ever  since 
the  execution  of  said  contract  in  their  power  to  do  so. 
And  defendants  allege  that  it  is  their  duty  as  aforesaid 
under  the  said  contract  co  do  so  and  although  conscience 
and  equity  compel  them  to  do  so  without  regard  to  the 
contract  in  order  to  prevent  the  execution  of  the  fraud 
attempted  to  be  committed  oy  them  as  hereinbefore  set 
forth  and  as  set  forth  in  the  answer  aforesaid. 

That  in  view  of  the  foregoing  facts  the  parties  to  the 
said  transaction,  and  all  of  the  stockholders  of  the  said 
defendant  company  ana  all  of  the  creditors  of  the  said 
defendant  company,  except  these  plaintiffs,  on  or  about 
the  10th  day  of  December,  1901,  and  sTnce  the  filing  of 
the  answer  above  set  forth,  entered  into  an  agreement, 
a  copy  of  which  is  made  a  part  hereof  and  marked  Ex- 
hibit "A"  to  this  cross-complaint.  By  the  contract 
all  of  the  interests  were  sought  to  be  protected  and  pro- 


48  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL, 

vided  for  as  it  was  believed  an^  is  believed  by  all  of  them 
that  the  said  lode  of  mineral-bearing  ground,  which  was 
the  subject  of  this  controversy,  and  for  the  operation 
of  which  the  said  defendant  company  was  formed,  has 
good  value  and  sufficient  to  pay  off  all  the  debts  of  the 
said  company  and  make  a  large  profit  for  its  owners, 
and  to  that  enu  tney  have  agreed  as  set  forth  in  said  ex- 
hibit. That  it  is  their  wish  that  the  receiver  herein  be 
removed  in  order  that  the  parties  may  execute  and  carry 
out  said  contract,  and  in  order  that  the  said-  parties  to 
said  exhibit  may  secure  ownership  of  said  mineral-bear- 
ing ground,  as  against  said  Mexican  company  and  tiiese 
plantiffs,by  securing  ownership  of  all  the  stock  of  the 
said  Mexican  company. 

They  have  also  contractea  that  the  debts  of  said 
C.  O.  Richards  and  said  Mrs.  Stuart  shall  be  provided 
for  and  their  payment  postponed  ai  the  option  of  said 
company  for  two  years,  within  which  time  the  said 
company  will  be  able  to  liquidate  and  pay  off  said  in- 
debteflness  in  full.  Thai  said  contract  represents  all  ot 
the  stock  of  th«  said  defendant  company,  and  said  stock 
has  been  placed  in  the  possession  of  I.  McManus,  named 
in  said  contract,  for  the  purpose  of  securing  a  full  com- 
pliance with  all  the  conditions  thereof,  and  to  said  con- 
tract the  said  Richards  ana  the  said  Mrs.  Stuart  have 
consented.  They  deny  that  the.  said  defendant  company 
was  indebted  to  said  Dr.  W.  F.  Chenoweth,  plaintiff, 
in  any  way,  and  they  allege  and  assert  that  upon  a  full 
account  of  all  transactions  of  said  Chenoweth  as  set 
forth  in  his  complaint,  and  in  the  answer  aforesaid,  and 
as  set  forth  in  the  complaint  and  answer  in  Case  No. 
114,  will  demonstrate  that  ine  said  W.  F.  Chenoweth  is 
a  lai%e  debtor,  to-wit,  of  not  less  than  $20,000,  but  of 


vs.  NOGALES  MINING  COMPANY  ET  AL.  49 

just  what  amount  these  defendants  do  nQt  know,  on  ac- 
count of  monies  which  were  placed  in  his  hands  as 
Manager  of  said  defendant  company.  That  while  Man- 
ager of  said  defendant  company  he  contracted  with 
said  defendant  company  to  erect  a  quartz  mill 
and  water  plant  for  the  contract  price  of  $35,000,  and 
that  he  was  paid  in  full  the  said  $35,000,  and  in  addition 
thereto  there  was  some  $42,000  placed  in  his  hands  by 
said  defendant  company,  and  he  states  that  while  Man- 
ager of  the  company,  the  directors  of  the  company  were 
his  friends,  who  gave  personally  very  little  attention 
to  said  business,  so  that  he  was  practically  dealing  with 
the  company's  money  and  contracting  with  the  company 
and  whatever  accounts  he  rendered  as  Manager  or  as 
contractor,  were  renderea  to  himself  as  above,  and  aud- 
ited by  himself,  and  these  defendants  say  that  the  only 
accounts  i.e  ever  rendered  to  the  defendant  company 
are  the  two  exhibits  set  forth  in  the  answer  heretofore 
filed  herein,  and  defendants  allege  that  said  exhibits 
are  no  accounting  at  all,  as  tney  do  not  show  how  the 
money  was  expended,  to  whom  or  what  lor  the  same 
was  paid  out.  But  it  does  not  show  that  the  funds  of 
the  said  defendant  company  were  used  in  acquiring  the 
denouncement  of  L„e  mining  claim  known  as  the  Grant 
above  named,  and  therefore  shows  that  the  said  funds 
were  used  in  acquiring  title  thereto  and  in  organization 
of  the  said  Mexican  company,  and  the  conveying  title 
aforesaid  to  said  Mexican  conjpany  was  all  done 
with  the  tunds  of  the  deiendant  company,^  and  as  all  of 
the  stock  o-  the  Mexican  company  is  owned  by 
plaintiffs  and  said  Grant  and  said  McPherson,  the  law 
makes  the  said  defendant  company  the  owner  in  equity 


50  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

as  a  resulting  trust  or  all  stock  in  the   said   Mexican 
coiEpany. 

Defendants  further  allege  that  one  C.  Ramirez  made 
a  denouncement  of  a  mining  claim  called  the  Ocampo  as 
clelijieated  in  the  map  attached  to  defendants'  answer 
'■•erein,  and  in  order  to  secure  whatever  title  might  have 
been  accrued  to  said  grouna  by  virtue  of  said  location, 
the  same  was  purchased  by  said  Dr.  W.  F.  Chenoweth 
and  the  sum  of  $500  or  $1,000  was  paid  in  cash  and  as 
a  part  of  the  purchase  price  out  of  the  funds  of  the  said 
defendant  company,  and  in  addition  thereto  the  prom- 
issory noie  of  the  said  defendant  company  was  given  for 
$5,000  to  Ramirez,  in  consideration  therefor.  And  the 
said  Dr.  W.  F.  Chenoweth  caused  the  said  deed  to  tne 
said  Ocampo  mining  claim  from  said  Ramirez  in  con- 
sideration of  said  purchase  price  to  be  made  not  -o  said  de- 
fendant company  but  to  himself  personally,  and  the  said 
Rpmirez  has  since  that  time  discovered  that  the  note  of 
the  said  defendant  company  given  to  him  as  aforesaid  i& 
without  authority  of  said  company,  and  he  has  since 
declared  in  a  solemn  pleading  before  a  court  of  competent 
jiirisdiction  in  Mexico,  and  under  oath,  that  the  said  de- 
fendant company  does  not  owe  him  a  dollar  in  considera 
tlou  of  the  purchase  price  of  the  said  mining  claim,  and 
defendant  is  informed  and  therefore  states  the  fact  to  be 
that  he  has  abandoned  the  same. 

Defendants  allege  that  they  are  informed  and  believe 
and  so  state  the  fact  to  be,  that  the  said  plaintiffs  are  nc 
longer  stockholders  of  the  said  defendant  company  but 
that  they  are  claiming  an  interest  in  the  ground  form- 
erly sold  as  aforesaid  to  the  defendant  company  under 
and  by  virtue  of  stock  they  hold  in  the  said  Mexican 
company. 


vs.  NOGALES  MINING  COMPANY  ET  AL.  51 

Defendants  therefore  pray,  that  the  said  plaintiffs  be 
required  to  answer  ciiis  cross  complaint  under  oath  and 
specifically.  And  that  the  court  discharge  the  said  re- 
ceiver, and  vacate  order  appointing  him  at  their  request 
and  return  sa'id  property  to  its  owners  and  tlie  stock- 
holders of  the  said  company,  and  that  the  said  plain- 
tiffs be  required  by  a  decree  of  this  court  to  peform  their 
contract  and  to  rignt  the  wrong  they  attempted  to  com- 
mit by  assigning  a  transfer  to  said  defendant  company 
one-half  of  the  stock  owned  and  held  by  them  in  the 
said  Mexican  company,  and  that  the  Court  also  decree 
the  amount  of  indebtedness  of  the  said  Dr.  W.  F.  Cheno- 
weth  to  said  defendant  company  and  render  judgment 
therefor,  and  for  such  other  and  further  relief  as  is 
agreeable  to  law  and  equity. 

D.  O.  Richardson  and  Barnes  &  Martin. 

Territory  of  Arizona,      ) 
County  of  Santa  Cruz,    ) 

C.  O.  Richards  and  Ray  Ferguson  being  duly  sworn,  on 
oath  states,  that  he  has  read  the  foregoing  cross-com- 
plaint and  he  has  also  read  the  answer  filed  herein  and 
above  referred  to,  and  he  scates  that  the  same  is  true 
in  fact  except  as  to  those  matters  stated  upon  informa- 
tion and  belief  and  as  to  those  matters  he  believes  it  to 
be  true. 

Subscribed  and  sworn  to  beiore  me  this day  of 

January,  A.  D.,  Iy02. 

S.  F.  NOON, 
Clerk   District  Court. 
"A" 

We,  the  undersigned  creaitors  and  stockholders  of  the 
Nogales  Mining  Company,  for  and  in  consideration  of  the 


52  PVPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

premises,  and  reiying  upon  the  faithful  fulfillment  oi 
the  following  contract,  agree  as  follows,  to- wit: 

First,  to  petition  Judge  George  R.-  Davis  to  remove 
receiver  ot  the  said  company,  and  to' this  end.  Individual- 
ly and  collectively   to  use  our  uest  efforts. 

Second,  to  prosecute  with  all  haste  and  vigor  suit  for 
consolidation  of  the  Cerro  Prieto  Company  of  Sonora, 
Mexico,  with  the  Nogales  company,  and  the  transfer  of 
all  the  property  of  the  former  to  the  latter. 

Third,  to  prosecute  accounting  suits  against  aV 
debtors  of  the  said  Nogales  Mining  company. 

Fourch,  debts  of  C.  O.  Richards  against  the  Nogales 
Mining  Company  to  be  secured  for  twenty  thousand  dol- 
lars, balance  of  said  debt  to  be  iioating  indebtedness  of 
said  company,  all  to  bear  interest  at  the  rate  of  6  per 
cent,  per  annum  from  ^.aie  of  execution,  interest  payable 
semi-annually. 

•  Fifth,  debts  of  Mrs.  H.  Stewart  to  be  secured  by  second 
mortgage  to  bear  interest  at  the  rate  of  8  per  cent  per 
annum  from  ihe  date  of  execution,  interest  payable  semi- 
annualy. 

Sixth,  the  first  mortgage  of  C.  O.  Richards  and  the 
second  mortgage  of  Mrs  .H.  Stewart  shall  be  on  all  the 
property  of  the  company  and  shall  be  paid  before  the 
period  of  two  years,  but  it  is  understood  that  should  said 
company  choose  to  pay  said  debt  sooner,  the  said  credit- 
ors, and  each  of  them,  shall  be  forced  to  receive  their 
money,  and  release  said  mortgage. 

Seventh,  the  stockholders  agree  that  the  interests 
owned  and  represented  by  them  are  as  follolws: 

C.   O.   Richards 50    per  cent 

R.  E.  Doan 11.6  per  cent 


vs.  NOG  ALES  MINING  COMPANY  ET  AL.  53 

J.  A.  Cooper,  R.  A.  McPherson  and  Ray 

Ferguson,  total  of 15.6  per  cent 

A.  D.  Shrewsbury 12.9  per  cent 

Ray  &  Patterson,  total 10    per  cent 

all  of  which  said  stocK  the  parties  to  this  agreement 
do  hereby  transfer  to  I.  McManus,  as  trustee,  except  one 
share  of  stock  each.  The  said  trustee  shall  have  power  by 
these  presents  to  force  each  party  to  this  contract  to 
comply  strictly  with  the  terms  hereof,  and  do  hereby 
iuthorize  him  to  hold  the  stock  of  each  party  to  this 
contract  until  they  have  so  complied  as  above  stated. 

Eighth,  R,  A.  McPherson  ana  Jesse  R.  Grant  do 
hereby  agree  to  use  their  best  efforts  to  force  said  con- 
solidation above  referred  to,  and  stand  ready  to  trans- 
fer their  stocK  anu  all  interests  owned  by  them  to  the 
No^ales  company  as  soon  as  tne  Court  will  force  The 
owners  of  the  other  half  interest  in  said  company  to  do 
likewise. 

Ninth,  in  case  of  any  litigation  whatsoever,  between 
C.  O.  Richards  and  any  person  whatsoever  as  to  his  50  per 
cent  of  said  Nogales  Mining  Company  stock,  said  C.  O. 
Richards  to  bear  aii  such  expense  necessitated  by  siuct 
litigation  personally, 

Albert  D.  Shrewsbury. 

Chas.  D.  Richards. 

Jesse  R,  Grant, 

By  Chas.  O.  Richards,  Attorney  in  fact. 

James  A.  Cooper. 

R.  E.  Doan. 

S.  A.  Briggs, 

By  J.  May  Morrison,  their  Attorney  in  Fact 

Ray  Ferguson. 

R.  A.  McPherson,  by  Ray  Ferguson,  Attorney  in  Fact 


54  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

We  the  undersigned  creditors  of  the  iNogales  Mining 
Company  have  read  ^  the  loregoing  contract,  and  hereby 
agree  to  and  acquiesce  in  the  same,  and  to  accept  the 
conditions  therein  contained  as  applying  to  our  claims. 

Chas.  O.  Richards. 

Henrietta  Stuart,  by  Eb.  Williams,  her  attorney. 


vs.  NOGALES  MINING  COMPANY  ET  AL.  65 


Answer  to  Cross  -  Complaint 

In   the   District  Court  of  the  First  Judicial  District, 
Territory  of  Arizona,  County  of  Santa  Cruz. 
H.  K.  Chenoweth  and  W.  F.  Chenoweth,  Plaintiffs, 

vs. 
Nogales    Mining   Company,    a   Corporation,    R.    A.    Mc- 
Pherson,    Ray   Ferguson,   R.    E.   Doan,   C.    O.    Richards 

and  Jesse  R.  Grant,  Defendants. 

MOTIONS  AND  DEMURRER. 
I. 

Plaintiffs  show  that  defendants'  cross-complaint  con- 
tains irrelevant  and  redundant  matter,  to-wit,  that  part 
of  the  same  beginning  with  line  four  on  page  four  there- 
of to  the  end  thereof,  together  with  "exhibit  A"  at- 
tached thereto;  that  the  part  thereof  from  lino  four  on 
page  four  thereof  to  line  one  of  page  five  thereof  is  ir- 
relevant and  redundant  matter  in  that  it  sets  forth  a 
contract  that  bears  no  relation  to  plain  tiffs  and  cannot 
affect  plaintiffs'  rights  or  obligations,  and  that  "exhibit 
A"  is  irrelevant  and  redundant  matter  for  the  same  rea- 
son; that  the  part  thereof  from  line  one  on  page  five 
to  line  twenty  on  page  six  is  irrelevant  and  redundant 
matter  as  being  not  pertinent  to  the  cross-complaint,  but 
should  be  incorporated  in  the  answer  to  plaintiffs'  com- 


56  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL, 

plaint,  as  answer  to  the  allegations  therein:  Wherefore 
plaintiffs  move  that  defendants  be  required  to  strike 
the  san?e  from  the  said  cross-complaint. 

II. 

Plaintiffs  show  that  defendants'  cross -pomplaiut  is  not 
definite  and  certain  in  this,  that  it  cannot  he  ascertained 
therefrom  whether  it  be  a  bill  for  specific  performance  of 
a  contract  or  an  action  for  misappropriation  of  funds  of 
defendant  company  or  a  bill  for  an  accounting  or  a  bill 
of  discovery.  Wherefore  plaintiffs  move  that  defendants 
be  required  to  make  the  same  definite  and  certain. 

III. 

Plaintiffs  demur  to  said  cross-complaint  on  the 
ground  that  it  appears  upon  the  face  thereof  that  the 
Court  has  no  jurisdiction  of  the  subject  of  the  action 

IV. 

Plaintiffs  demur  to  said  cross-complaint  on  the  ground 
that  if  the  same  be  a  bill  for  specific  performance  of 
contract  it  appears  upon  the  face  thereof  that  there  is 
a  defect  of  parties  defendant  to  said  cross-complaint,  in 
that  the  Cerro  Prieto  Mining  Company  is  a  necessary 
party  thereto. 

V. 

Plaintiffs  demur  to  said  cross-complaint  on  the 
ground  that  several  causes  of  action  are  Improperly 
united,  towit,  a  bill  for  the  specific  performance  of  a 
contract,  an  action  for  the  misappropriation  of  funds  of 
defendant  company,  a  bill  of  a  discovery,  and  a  bill  for 
an  accounting. 


vs.  NOGALES  MINING  COMPANY  ET  AL.  57 

VI. 

Plaintiffs  demur  tO  said  cross-complaint  on  the  ground 
that  the  same  does  not  state  facts  suflBcient  to  consti- 
tute a  cause  of  action. 

ANSWER. 
VII. 

The  foregoing  motions  and  demurrers  having  been 
overruled,  plaintiffs  now  come  and  for  answer  to  the 
cross-complaint  filed  in  the  above-entitled  action  re- 
spectfully show  to  this  (Jourt: 

That  it  is  not  true  that  the  said  plaintiffs  after  they 
had  conveyed  or  caused  .o  be  conveyed  to  the  Nogales 
Mining  Company  the  mine  known  and  described  as  the 
Zaragoza  mine  caused  the  boundaries  of  the  same 
to  be  altered  and  changed,  but  that  the  truth  is  that  the 
boundaries  of  the  said  mine  haa  been  established  be- 
fore these  plaintiffs  acquired  any  interest  in  the  said 
claim;  that  the  title  paper  of  the  same  had  been  issued 
by  the  Mexican  government;  that  under  the  Mexican 
laws,  before  the  issuance  of  the  title  paper  to  a  mining 
claim,  the  claim  must  be  surveyed  by  the  government 
surveyor  ana  the  boundaries  thereof  established  by  him 
and  a  plat  made  of  the  same,  a  copy  of  which  plat  in 
the  case  of  the  Zaragoza  mine  is  of  record  in  the  proper 
government  oflSlce  in  the  City  of  Mexico,  a  copy  like- 
wise in  the  city  pf  Magdalena,  Sonora,  capital  of  the 
district  in  which  tae  said  claim  is  situated,  and  a  copy 
whereo.  is  likewise  attacned  to  the  title  paper  as  issued 
by  the  Mexican  government  for  thQ  said  claim.  Plain- 
tilts  prior  to  tne  time  in  which  they  purchased  their 
interest  in   the  saiv    Zaragoza  minmg  claim  had  never 


'58  •   '  |»Ai>EIig  IK  THE  CASE  OF  CHENOWETH  ET  AL. 

been  on  said  claim  and  had  never  seen  said  claim,  but 
bougnt  their  interest  in  the  same  solely  on  the  recom- 
mendation of  the  defenaant  R.  A.  McPherson.  Plaintiffs 
assert  that  if  wnen  the  said  mine  was  located  and 
monumented,  it  was  so  located  and  monumented  that  the 
ledge  or  lode  bearing  valuable  minerals  ran  along  the 
center  of  the  claim,  plaintiffs  qo  not  know  the  fact,  but 
assert  upon  information  and  beuef  that  the  claim  as  it 
now  stands  is  as  it  was  locateu  and  monumented  at  the 
time  ihe  title  papers  were  issued  to  the  owner  from 
whom  plaintiffs  acquired  their  interest  as  bef  or  estate  d, 
and  that  no  change  therein  has  ever  at  any  fime  been 
made.  i^Mrther  plaintiffs  deny  that  to  all  of  the  said 
parties  or  to  any  of  them,  the  agents  of  the  said  Mrs. 
Stuart,  or  to  the  defendant  Richards,  or  to  his  at- 
torney or  experts  or  to  any  of  them,  they  exhibited  and 
showed  that  the  ground  owned  oy  the  defendant  com- 
pany was  ground  tha^  included  tne  said  mineral  bearing 
lode  or  ledge  for  a  distance  of  five  hundred  meters,  and 
that  all  of  the  said  parties-defendants  or  any  of  them 
who  invested  in  the  stock  of  the  said  defendant  com- 
pany and  who  loaned  money  to  the  said  defendant  com- 
pany were  made  by  the  said  plaintiffs  to  believe  or  did 
believe  by  reason  of  the  fact  that  the  said  plaintiffs 
showed  the  bounuaries  upon  the  ground  of  the  sai( 
claim  to  be  such  as  to  include  the  saia  five  hundred 
meters  of  the  said  mineral  bearing  lode  or  ledge,  but 
«how  the  fact  to  be  that  the  said  plaintiffs  never  show- 
ed the  boundaries  upon  the  ground  of  the  said  claim 
to  any  person  at  any  time  whatsoever,  nor  did  plaintiffs 
themselvejs  until  long  after  the  investment  in  the  stock 
of  the  saia  defendant  company  by  the  said  defendants 
and  the  loaning  of -money. by  the,  said  creditors  know 


VS!i^6CALfig  MINING  COMPANY  ET  AL.  59 

W^ere  the  true  boundaries  oi  the  said  claim  werci  Plain-, 
tiffs  lurther  deny  that  all  of  the  transactions  of  the 
said  parties  wer6  base:,  upon  the  understanding  that 
._e  said  claim  incluaed  said  ledge,  for  saia  five  hundred 
meters  or  were  based  upon  statements  concerning  the 
said  ground  and  the  boundaries  thereof  by,  the  said 
plaintiffs,  but  allege  the  truth  thereof  to  be  that  the 
plaintiffs  themselves  believed:  at  the  time.  ojC  th«> 
transaction  referred  tO  in  the  said  cross-complaint  that 
the  said  claim  did  include  said  .edge  for  said  five  hun- 
dred meters  and  the  said  plaintiffs  expressed  said  belief, 
but  that  said  plaintiffs  did  not  show  to  any  one  upon 
the  ground  the  bounuaries  of  tne  saia  claim,  apu  e-.d 
not  know  at  the  time  mentioned  in  said  cross-complaint 
Where  the  said  bounaaries  were^  but  as  before  statedi 
relieu  upon  the  representations  made  to  them  by  the 
saiu  R.  A.  Mca  herson  and  upon  those  representation;, 
based  their  belief  anu  paid  money  for  th^  transfer  of  the 
said  mining  claim.  Plain. .xfs  allege  that  throughout  all 
bf  the  transactions  connected  with  the  matters  alleged  in 
the  said  cross-complaint  as  well  as  all  others  both  prior 
to  and  subsequent  to  and  contemporaneous  with  or  in  any 
wise  relating  to  the  property  m  question  all  representa- 
tions that  plaintiffs  have  made  have  been  made  upon 
honest  belief  in  the  truth  of  those  representations  .-y  the 
plaintiffs  and  that  they  nave  acted  in  absolute  faith. 

Plain txfts  further  show  that  tney  did  not  afterwards 
with  intent  to  and  for  the  purpose  of  defrauding  said 
defendant  company  and  ..le  said  Mrs.  Stuart  and  other 
investors  in  the  stock  of  the  ^aid  conipany,  and  to  de- 
prive v-^e  said  company  of  the  ownership  of  the  said  five 
hundred  meters  of  .he  said  mineral  bearing  ledge  or  lode 
claim,   pretend   that   the   said    Zaragoza     claim     ^wung 


60  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

SO  mat  it  bore  to  an  ang^e  across  the  said  mineral  'Gear- 
ing lode  or  ledge  and  left  only  a  part  of  the  said  min- 
eral bearing  lode  or  ledge  crossing  the  corner  of  the  said 
Zaragoza  mining  claim  diagonally,  but  show  the  truth  of 
the  matter  to  be  that  in  January  or  February,  A.  D. 
1900,  they  were  informed  by  the  defendant  Jesse  R. 
Grant,  who  was  then  Manager  of  the  said  defendant 
company  and  personally  preseht  at  the  said  mine  and 
in  charge  of  the  working  thereof,  that  the  said  claim  as 
shown  by  the  title  papers,  so  bore  at  an  angle  across  the 
said  mineral  bearing  lode  or  ledge,  as  in  this  said  cross- 
complaint  set  forth,  which  was  the  first  knowledge  or 
intimation  or  suggestion  of  the  fact  that  the  plaintiffs 
had  received.  Plaintiffs  furtner  show  that  the  defen- 
dant Grant  at  the  time  he  conveyed  this  information  to 
plaintiffs  likewise  informed  plaintiffs  that  he  had  de- 
nounced under  the  Mexican  laws  a  claim  which  he  call- 
ed the  Nogales  claim,  which  would  remedy  the  de- 
fective course  of  the  said  Zaragoza  claim,  which  said 
Nogales  claim  said  defendant  Grant  informed  plain- 
tiffs he  would  transfer  to  the  Nogales  Mining  Com- 
pany as  soon  as  the  title  of  the  said  claim  should  be  re- 
ceived by  him,  provided  that  the  company  found  it  im- 
possible under  the  Mexican  laws  by  a  resurvey  so  to 
locate  the  said  Zaragoza  mining  claim  as  to  cause  it  to 
cover  the  desired  grouna.  Plaintiffs  deny  that  they  de- 
nounced the  said  Nogales  claim  but  show  that  as  be- 
fore stated  it  was  aenounced  by  the  said  T)laintiff  Grant. 
Plaintiffs  further  aeny  that  they  denounced  the  said 
Cerro  Prieto  claim  but  allege  that  the  said  defendant 
Grant  denounced  the  said  Cerro  Prieto  mining  claim. 
Plaintiffs  admit  that  plaintiff  H.  K.  Chenoweth  de- 
nounced the  Grant  'claim  and  the  Elisa  claim  but  allege 


vs.   NOG  ALES  MINING  COMPANY  ET  AL.  61 

tlie  truth  as  to  those  claims  to  be  that  neither  of  them 
i&  within  ground  trial  by  any  location  whatsoever  of  the 
saiQ  Zaragoza  claim  on  the  saiQ  ledge  or  lode  as  alleged 
in  the  said  cross-complaint,  cou.i  be  covered  by  the 
said  Zaragoza  claim.  Plaintiffs  further  show  that  the 
said  Cerro  Prieto  mining  claim  covers  ground  which  could 
not  by  any  means  conflict  with  ground  that  by  any  man- 
ner of  survey  could  be  included  Wicxiiri  the  said  Zara- 
goza claim,  and  that  the  Nogales  claim  aforesaid  is  the 
only  one  of  the  said  claims  that  covers  ground  that 
could  be  covered  by  tne  said  Zaragoza  claim  if  the 
course  of  the  said  Zaragoza  claim  could  be  changed  by 
a  new  survey.  Plaintiffs  deny  that  the  effect  of  the  afore- 
said denouncement  was  if  valid  to  destroy  the  value  of 
tlie  said  Zaragoza  mining  claim  or  to  deprive  said  defend- 
ant company  of  all  of  its  valuable  mineral  bearing  ground, 
but  show  the  truth  to  be  that  there  appears  to  be  or 
said  Zaragoza  mining  claim  a  mineral  bearing  lode  or 
ledge  of  considerable  vdlue  running  tlie  entire  length  of 
said  claim  aside  from  the  ledge  referred  to  in  the  said 
cross-complaint  which  crosses  the  said  claim  diagonally. 
Plaintiffs  admit  that  at  some  time  subsequent  to  the 
aforesaid  denouncement  they,  in  conjunction  with  de- 
feiidants  Grant  and  McPherson,  orgatiized  a  corporation 
under  the  laws  of  Mexico  called  the  Cerro  Prieto  Mining 
COmppny,  the  Stock  of  which  was  owned  by  plaintiffs 
and  by  the  said  defendants  Grant  and  McPherson,  but 
deny  that  by  meahs  thereof  the  said  plaintiffs  intended 
to  defraud  and  deiirlve  the  said  defendant  company  of  it^ 
valuable  mining  ground  and  to  secure  the  same  for 
themselves  by  virtue  of  the  said  denouncement  and 
the  saiQ  Mexican  cotnpahy  organized  as  aforesaid;  but 
allege  the  trutli  to  be  that  the  said  Jesse  it.  Grant  as- 


62  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL, 

serted  hie  willingness  that  the  title,  of  the  Nogales. 
claim  when  it  should  he  obtained,  provided  as  aforesaid 
that  the  location  of  tue  saiu  Zaragoza  claim  could  not 
be  amended  so  as  to  cover  the  ground -desired,  should 
be  conveyed  to  the  said  defendant  company,  but  re- 
fused to  convey  the  said  Cerro  Prieto  claim  to  the  said 
defendant  company  and  'proposed  to  plaintiffs,  that  they 
should  unite  with  him  and  the  said  McPherson  to  or- 
ganize a  corporation  to  own  the  beforementioned.  Cerra 
Prieto,  Grant  and  Elisa  Claims,  and  it  was  with  that  in- 
tention that  the  Said  corporation  was  organized. 

The  titles  of  the  aforesaid  claims  denounced  by  the 
said  Grant  and  by  the  said  piaintiff  H.  K.  Chenoweth . 
were  issued  a  few  weeks  prior  to  the  12th  day  of 
January,  A.  D.  1901.  Long  prior  to  the  issuance  of  the 
said  titles  one  Jas.  A,  Cooper  had  bought  from  the  de-. 
dendant  R.  A.  McPherson  all  of  his  interest  in  tne  said 
Cerro  PrietQ  Mining  Company,  the  said  McPherson  re- 
serving, as  plaintiffs  are  informed  and  believe,  a  lien  or 
stop  upon  all  of  the  interest  so  sold  to  the  said  Cooper, 
under  the  laws  of  Mexico,  until ,  such  time  as  the  said 
Cooper  should  pay  in  full  the  purchase  price  therefor. 
In  the  organization  of,  the  saia  Cerro,  Prieto  Mining 
Company  the  terms  Of  the  creative  act  of  the  said  cor^ 
poration  provided  that  the  said  corporation  should  own 
all  of  the  mining  claims  m  the  >  district  of  Magdalena,  iii 
which  the  hereinbefore  mentioned  mines  and  mining 
claims  are  situated,  which  should  be  or  were  owned,  4er 
nounced  or  acquired  in  any  way  whatsoever  by  the 
hereinbefore  mentioned  incorporators,  by,  which, terms 
the  said  corporation  became  entitled  to  the.  titles  of  th3 
mining  claims  denounced  by  the  said  defendant  Grant, 
including  the   said   Nogales   mining  claim,   and  by  the 


vs.   NOGALES  MINING  COMPANY  ET  AL.  63 

said  plaintiff  H.  K.  Chenoweth.  Immediately  upon  the 
issuance  of  the  titles  of  the  said  mining  claims  to  the 
said  corporation  the  pla,intiff  W,  F.  Chenoweth,  as  an 
officer  of  the  said  corporation,  had  a  proper  conveyance 
prepared  by  the  attorney  of  the  sdid  company,  to  con- 
vey the  said  Nogal«s  claim  to  the  said  defendant  com- 
pany, whereupon  the  defendant  McPherson  interposed  an 
objection  to  the  making  of  such  transfer  until  such  timo 
as  payment  should  be  made  by  the  aforesaid  Jas.  A. 
Cooper  for  the  said  McPherson's  interest  in  the  said  cor- 
poration, and  thus  prevented  tor  the  time  being  the  pro- 
posed conveyance.  Shortly  after  this  action  by  the  said  de- 
fendant kcPherson  there  was  held  in  Nogales,  Arizona, 
on  the  12th  day  of  January,  A.  D.  1901,  a  meeting  at 
which  all  of  th6  stockho^aers  of  the  said  Nogales  Mining 
Company  were  present  or  represented  by  proxy,  said 
meeting  being  the  same  meeting  named  ^n  the  said  cross- 
complaint.  At  this  meeting  there  were  present  the  plain- 
tiff W.  F.  Chenoweth,  the  aforesaid  James  A.  Cooper, 
and  the  defendant  v^rant,  members  of  the  said  Cerro 
Prieto  Mining  Company.  At  that  meeting  it  was 
agreed  unanimously  that  it  was  desirable  for  all 
parties  if  certain  conditions  couid  be  met,  that 
the  said  four  claims,  property  of  the  Cerro  Prieto  Mining 
Company,  should  be  conveyed  to  the  saia  Nogales  Min- 
ing Company,  and  it  was  then  agreed  by  the  stockhold- 
ers of  the  Nogales  Mining  Company  and  by  the  said  W. 
^.  Chenoweth  and  the  said  Grant  and  Cooper  on  the  part 
of  the  Cerro  Prieto  Mining  Company  that  the  Cerru 
Prieto  Mining  Company  would  convey  to  the  Nogales 
Mining  Company  the  beforementioned  four  claims, 
providM:  '  '      «  .  .  , 

'  IsL     That  the  amount  of  the  capital  stock  of  the  said 


64  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL, 

Nogales  Mining  Company  should  be  increased  to  fifty 
thousand  shares  of  the  par  value  of  ten  dollars  each. 

2nd.  That  there  should  be  issued  to  the  said  Cerra 
Prieto  Mining  Company  twenty-one  thousand  shares  of 
fiaia  stock, 

3rd.  That  seven  thousand  five  hundred  shares  of  the 
said  stock  should  be  sold  at  not  less  than  par  and  the 
proceeds  of  such  sale  should  be  used  as  assets  of  the 
Nogales  Mining  Company. 

4th.  That  the  Nogales  Mining  Company  should  with- 
in ten  days  pay  off  certain  pressing  local  obligations  and 
should  furnish  sufficient  money  to  pay  the  expenses  of 
the  transfer  of  the  said  property  from  the  said  Cerro 
Prieto  Mining  Company  to  the  said  Nogales  Mining  Com- 
pany, the  amount  named  to  be  lurnished  wifEin  ten  days 
being  nine  thousand  dollars,  and  should  immediately 
thereafter  from  the  sale  of  the  said  stock  pay  all  of  the 
obligations  of  the  said  company,  and  certain  of  the  stock- 
holders of  the  Nogales  Mining  (company  then  present 
gave  assurance  that  within  a  short  time  they  could  place 
said  amount  of  stock  at  par,  whereby  all  of  the  obliga. 
tions  of  the  said  company  could  be  paid. 

Immediately  following  this  aforesaid  meeting,  said 
plaintiff  W.  F.  Chenoweth  and  the  said  Jas  A.  Cooper 
went  to  Hermosillo,  Sonora,  and  arranged  with  the 
Iskwyex  of  th?  said  Cerro  Pi^ieto  Mining  Company  to  pre- 
pare the  necessary  conveyances  to  convey  the  aforesaid 
property  fropi  the  said  Cerro  Prieto  Mining  Company  to 
the  said  Nogales  Mining  Company. 

Plaintiffs  further  show  that  at  the  rnei^tixi^  ot  the 
Stockholders  of  the  Nogales  Mining  Company  aforesaid, 
the  defendant  R.  E.  Doan  offered  on  behalf  of  the  said 
Mrs.  Stuart  to  give  to  the  said  Nogales  Mining  Company 


vs.  NOGALES  MINING  COMPANY  ET  AL.  65 

Eix  thousand  dollars  If  the  said  Nogales  Mining  Com- 
pany would  execute  to  her  its  promissory  note  for  eight 
thousand  five  hundreu  dollars,  to  be  dated  January  12th, 
A.  D.  1901,  payable  in  six  months  after  date  with  inter- 
est at  the  rate  of  twelve  per  cent  per  annum  from  date, 
and  would  give  to  him,  the  said  R.  B.  Doan,  five  hundred 
shares  of  the  stock  of  the  said  company.  Said  six  thous- 
and dollars  was  accepted  ana  was  all  applied  in  part 
payment  of  the  immediate  pressing  local  debts  of  the 
company. 

No  money  was  ever  furnished  or  offered  to  the  plain- 
tiffs or  to  anyone  representing  the  Cerro  Prieto  Mining 
Company  to  pay  for  tne  perfecting  of  the  conveyance  of 
the  beforementioned  property  to  the  said  Nogales  Mining 
Company,  and  no  stock  of  the  said  Nogales  Mining  Com- 
pany was  sold,  and  for  that  reason  the  said  conveyance 
was  not  made,  though  these  plaintiffs  were  ready  and 
willing  at  all  times  up  to  the  said  12th  day  of  April,  A.  D. 
1901,  at  which  time  was  entered  into  the  contract  set 
forth  in  plaintiffs'  complaint  as  "exhibit  A"  and  *B,"  to 
co-operate  with  the  other  stocKuolders  of  the  said  Cerro 
Prieto  Mining  Company  to  cause  the  completed  trans- 
fer of  the  said  property  to  the  Nogales  Mining  Com- 
pany, whenever  the  said  Nogales  Mining  Company 
should  furnish  money  to  pay  the  expenses  thereof,  and  so 
far  as  these  plaintiffs  are  concerned  they  have  been 
ready  and  willing  at  any  time  and  are  ready  and  willing 
to  co-operate  with  the  other  stockholders  of  the  said 
Cerro  Prieto  Mining  Company  to  transfer  the  said  prop- 
erty to  the  said  Nogales  Mining  Company  upon  the  ful- 
fillment of  all  of  the  terms  of  the  agroi^uioiLt  ot  January 
12th,  A.  D.  1901,  that  is  to  say,  upon  the  payment  by  the 


66  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AI. 

said  Nogales  Mining  Company  of  all  of  its  obligations, 
and  of  the  expenses  of  the  said  transfer. 

Plaintiffs  allege  upon  information  and  belief  that  the 
defendant  Jesse  R.  Grant  is  no  longer  a  fttockholdor  ot 
the  Cerro  Prieto  Mining  Company,  but  show  the  fact  to 
be  that  all  of  his  interest  in  the  said  Cerro  Prieto  Min- 
ing Company  has  been  sold  and  transferred  to  one  J. 
Guillermo  Dominguez. 

Plaintiffs  further  show  that  as  to  the  alleged  contract 
of  the  10th  day  of  December,  A.  D.  1901,  set  forth  in 
the  said  cross-complaint  and  in  the  "exhibit  A"  at:ached 
thereto,  plaintiffs  know  nothing  and  can  answer  nothing. 

Plaintiffs  further  deny  that  the  plaintiff  W.  1^.  Cheno- 
weth  is  a  large  debtor  to  the  said  Nogales  Minin.^-  Com- 
pany, or  a  debtor  to  it  in  any  sum  whatsoever,  b-it  assert 
the  fact  to  be  that  on  the  contrary  the  said  Nogale?  Min- 
ing Company  is  in  debt  to  the  plaintiff  W.  F.  Chenoweth 
in  the  sum  of  approximately  four  thousand  dollars. 

Plaintiffs  admit  that  in  the  accounts  submitted  to  tlic 
defendant  company  are  items  of  expenditures  made  for 
the  plaintiffs'  own  interest  and  in  paying  for  the  survey 
of  the  said  Grant  mining  claim,  and  state  the  fact  to  be 
as  to  those  items  that  they  were  accepted  by  the  said  com- 
pany as  offsets  to  obligations  owed  by  the  said  company 
to  the  said  plaintiffs.  Plain u.^3  state  that  they  do  not  know 
what  specific  items  are  covered  by  sucn  accounts  and 
therefore  can  neither  admit  nor  deny  that  the  accounts 
referred  to  in  the  said  cross-complaint  show  that  the 
funds  oi  the  defendant  company  were  used  in  acquiring 
title  to  the  said  Grant  mining  claim  and  m  organizing 
the  said  Cerro  Prieto  Mining  Company  and  the  convey- 
ing title  to  the  said  Cerro  Prieto  Mining  Company,  but 
allege  the  fact  to  be  chat  any  and  all  items  of  such  na- 


vs.  NOG  ALES  MINING  COMPANY  ET  AL.  67 

ture  were  assumed  by  the  said  Nogales  Mining  Company 
solely  as  payment  of  the  amount  of  such  items  to  the 
said  plaintiffs  on  bi..s  due  to  the  said  plaintiffs  from  the 
defendant  company,  and  that  such  accounts  were  passed 
upon  and  approved  by  the  proper  officers  of  the  said 
company. 

Plaintiffs  deny  that  the  plaintiff  W.  F.  Chenoweth 
caused  a  deed  to  be  made  for  the  said  Ocampo  mining 
claim  to  him  from  one  C.  Ramirez.  Plaintiffs  show  the 
truth  of  the  matter  to  be  that  the  cash  that  is  alleged 
to  have  been  paid  to  the  said  C.  Ramirez,  was  paid,  alid 
the  note  that  is  alleged  to  have  been  given  to  him,  was 
given,  by  the  said  defendant  company  to  the  said  C. 
Ramirez  at  a  time  when  the  defendant  Grant  was 
Manager  of  the  said  company  and  not  under  the  manage- 
ment of  the  plaintiff  W.  F.  Chenoweth. 

Wherefore,  plaintiffs  pray  that  the  defendants  take 
nothing  by  this  cross-complaint,  and  for  their  costs,  and 
for  such  judgment  or  order  as  to  the  Court  may  seem 
good. 

H.  K.  Chenoweth  and  W.  F.  Chenoweth. 
-y  Frederick  S.  Nave,  their  attorney. 


Territory  op  Arizona,      ) 
County  of  8anta  Cruz.  )     ' 

W.  F.  Chenoweth  being  duly  sworn  on  oath  states  that 
he  has  read  the  foregoing  answer  and  states  that  the 
same  is  true  in  substance  and  in  fact  except  as  to  those 
matters  therein  stated  upon  information  and  belief,  and 
that  as  to  those  matters  he  believes  it  to  be  true. 

Subscribed  and  sworn  to  before  me  this  6th  day  of 
January,  A.  U.  1902. 

(Seal)  FREDERICR  S.  NAVE, 

Notary  Public. 


PAPERS  IN  THE  CASE  OF  CHEKOWETH  ET  AL, 


Minutes  of  the  Nogales 
Mining  Company 


NOGALES,  ARIZ.,  Oct.  17,  1899. 
Office  of  Dr.  Chenoweth: 

Meeting  of  the  Nogales  Mining  Company,  there  being 
present  Jesse  R.  Grant,  Alfred  Hampton  and  H.  K.  Chen- 
oweth. 

Meeting  called  to  order  at  9  a.  m.,  Jesse  R.  Grant,  pre- 
siding. 

On  motion,  H.  K.  Chenoweth  was  chosen  president, 
and  Jesse  R.  Grant,  secretary. 

Stock  of  the  company  was  then  placed  on  the  market, 
resulting  in  the  sale  of  certificate  No.  1,  to  Jesse  R. 
Grant,  representing  10  shares,  for  $100.00;  certificate 
No  2,  representing  10  shares,  for  $100.00,  to  H.  K.  Cheno- 
weth, certificate  No.  3,  representing  10  shares,  to  R.  A. 
McPherson,  for  $100.00,  certificate  No.  4,  representing 
10  shares,  to  W.  F.  Chenoweth,  for  $100.00.  Alfred  Hamp- 
ton not  desiring  to  purchase  any  stock,  sent  in  his  res- 
ignation as  a  director  and  member  of  the  company, 
which  resignation  was  duly  accepted.  Jesse  R.  Gram 
H.  K.  Chenoweth,  W.  F.  Chenoweth  and  R.  A.  McPher- 
son were  duly  elected  directors  Oxlhe  company. 

The  secretary,  J.  R.  Grant,  and  the  president,  H.  K. 


vs.   NOQALES  MINING-  COMPANY  ET  AL.  69 

Chenowetli,  who  had  been  duly  elected  to  these  offices, 
were  on  motion  appointed  a  committe  to  pureuase  the 
Zaragoza  mine,  located  in  th«  District  of  Magdalena. 
Sonora,  Mexico. 

The  Board  of  Directors  decided  to  meet  at  Doctor 
Chenoweth's  office  tomorrow  at  4  p.  m. 

There  being  no  further  business,  the  meeting  adjourn- 
ed. 

JESSE  R.  GRANT,  Secretary, 

(Seal  of  the  Nogales  Mining  Co.) 

NOGALES,  ARIZ.,  Oct  18,  1899, 

Meeting  of  the  Board  of  Directors  of  the  Nogales  Min- 
ing Company  held  at  Doctor  Chenoweth's  office  this 
18th  day  of  October,  1899,  at  4  p.  m. 

Meeting  called  fo  order  by  H.  K.  Chenoweth,  presid- 
ing. Present:  J.  R.  Grant,  R.  ik,  McPherson  and  W.  P. 
Chenoweth. 

J.  R.  Grant  and  H,  K.  Chenoweth  report  having  pur- 
chased the  Zaragoza  mine. 

On  motion,  the  Secretary  was  ordered  to  have  all  cor- 
poration papers  properly  recorded  in  Magdalena,  Mexico. 

On  motion,  it  was  ordered  that  R.  A.  McPherson  be 
made  our  authorized  agent  to  act  in  the  Republic  of 
Mexico. 

Doctor  Chenoweth's  office  was  selected  as  our  legal  of- 
fice until  lurther  ordered. 

There  being  no  further  business,  the  meeting  adjourn- 
ed to  meet  again  at  ihe  call  of  the  Secretary. 

JESSE  R.  GRANT,  Secretary. 

(Seal  of  the  Nogales  Mining  Co.) 

NOGALES,  ARIZ.,  Jan,  12,  1900. 

Meeting  of  the  Board  or  Directors  oi  the  Nogales  Min- 


70  PAP;EKS  IN"  THE  CASE  OF  CHENQWETH  ET  AL, 

ing  Company  held  at  Doctor  Chenoweth's  office  this  12ih 
day  of  January,  1900,  at  11  a,  m. 

H.  K.  Chenoweth,  president  of  the  company,  presid 
ing.     On  call  of  roll,  H.  K.  Chenoweth,  president,  J.  R, 
Grant,  Secretary,  W.  F.  Chenoweth  and  R.  A.  McPher- 
son,   present,    ..^ey   being  all   the  stockholders   as   well 
as  all  of  the  directors. 

Minutes  of  previous  meeting  read  and  approved.  Oft 
motion  it  was  decided  to  amend  Article  (6)  Six  of  th'? 
articles  of  incorporation  of  the  company,  so  as  to  read: 

"The  highest  amount  of  indebtedness  or  liability  to 
which  this  corporation  is  at  any  time  to  subject  itself 
Is  Eighty  Thousand  Dollars"  instead  of  the  highest 
amount  oi  indebtedness  being  limited  to  $20,000.00.  So  or- 
dered, and  the  secretary  of  the  company  instructed  to 
see  that  said  amended  article  be  so  changed,  and  legally 
attended  to,  and  to  call  anoiner  meeting  of  the  Board 
as  soon  as  so  completed. 

There  being  no  further  business,  the  meeting  adjourn- 
ed to  meet  at  the  call  of  tne  secretary. 

JESSE  R.   GRANT.   Secretary. 

(Seal  of  the  Nogales  Mining  Co.) 


NOGALES.  ARIZ.,  Jan.  22,  1900. 

Meeting  of  the  Board  of  Directors  of  the  Nogales  Min- 
ing Company  held  this  22nd  day  of  January,  1900,  at 
Doctor  Chenoweth's  office,  H.  K.  Chenoweth,  presiding. 

On  call  of  roll  a  majority  of  the  stock  represented, 
and  a  majority  of  the  directors  present,  being  H.  K. 
Chenoweth,  W.  F.  Chenoweth  and  Jesse  R.  Grant. 

Minutes  of  previous  meeting  read  and   approved. 

The  secretary,  J.  R.  Grant,  reports  having  complied 
with  the  instructions  of  the  Board  of  last  meting,  order- 


vs.  NOGALES  MINING  COMPANY"  ET  AL.  71 

Jng  him  to  proceed  to  legalize  the  amendment  of  the 
fcy-laws,  stating  that  they  have  been  duly  recorded  and 
ordered  printed  according  to  law. 

On  motion  it  was  duly  ordered  that  tlie  secretary,  J. 
R.  Grant,  and  the  president,  be  and  are  hereoy  appoint 
•ed  a  committee  to  procure  the  necessary  amount  of 
money  to  erect  mills  and  reduction  works,  etc.,  and  to 
work  th^  mine,  and  that  they  be  and  are  hereby  empow- 
ered to  mortgage  the  company's  property  to  secure  said 
loan,  and  they  are  instructed  to  secure  the  best  possible 
terms,  etc 

There  bein^  no  further  business,  the  meeting  adjourn* 
«d  to  meet  again  at  the  call  of  the  secretary, 

JESSE  R.  GRANT,  Secretary, 

(Seal  of  the  Nogales  Mining  Co.) 


NOGALES,  ARIZ.,  March  9,  1900. 

Meeting  of  the  Board  of  Directors  of  the  Nogales  Min- 
ing  Company  held  in  Doctor  Chenoweth's  office  this  9th 
day  of  March,  1900,  at  10  a.  m. 

On  call  of  roll  a  majority  of  the  stock  and  directors 
being  present  in  the  persons  of  W.  F.  Chenoweth,  J.  R. 
Grant  and  H.  K,  Chenoweth.  Minutes  of  previous  meet- 
ing read  and  approved. 

The  president,  H.  K.  Cnenoweth,  and  J.  R.  Grant,  sec- 
retary, report  having  made  the  following  contract,  which 
is  unanimously  ratified,  to-wit: 

"By  virtue  of  the  powers  invested  In  us  as  president 
and  secretary  of  the  Nogales  Mining  Company,  and  by 
virtue  of  the  authority  given  us  at  a  meeting  of  the 
Board  of  Directors  of  said  company  January  22,  1900,  we 
hereby  assign  over  to  Henrietta  Stuart,  all  of  the  title, 
papers  and  stock  of  said  company,  together  with  the  ma- 


ri  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

chinery  and  improvements  that  are  now,  or  that  may  be 
erected  thereon,  to  be  held  in  escrow  by  the  said  Henriet- 
ta Stuart,  to  secure  a  loan  of  fifty  thousand  dollarr,, 
made  by  ner  to  said  company,  for  the  purchase  of  i  .e  nec- 
essary machinery  and  erecting  the  same,  and  for  mills 
'  and  reduction  works,  etc.,  for  the  working  of  said  mines. 
This  loan  for  the  purposes  aforesaid  is  to  draw  ten  per 
cent  interest  from  this  date,  and  to  be  paid  January  1, 
1901,  with  its  accumulated  interest,  with  a  commission 
on  the  money  so.  loaned  as  to  make  the  loan  when  paid 
as  aforesaid  $55,000.00.  Upon  full  payment  of  said  amount 
all  the  title,  papers  and  documents  so  held  in  escrow, 
are  to  be  returned  to  said  company.  Signed  this  9th  day 
of  March,  1900,  duly  signed  by  the  president  and  secreta- 
ry. 

They  then  proceeded  to  issue  stock  to  the  following 
persons:  J.  R.  Grant,  (1390)  one  thousano  three  hundred 
and  ninety  shares;  to  order  of  H.  K.  Chenoweth  two 
certificates  of  800  shares  each ;  one  other .  certificate  to 
H.  K.  Chenoweth,  for  one  thousand  three  hundred  and 
ninety  shares;  to  R.  A.  McPherson,  one  thousand  three 
hundred  and  ninety  shares;  to  W.  F.  Chenoweth,  one 
thousand  three  hundred  and  ninety  shares;  to  R.  E, 
Doan  and  J.  A.  Cooper,  certificate  No.  9  for  eight  hun- 
dred shares. 

On  motion  it  was  ordered  that  J.  A.  Cooper  be  made 
treasurer  of  the  company.  Mr,  Cooper  is  a  resident  of 
Washington,  D.  C,  but  being  present  reports  receiving 
into  his  hands  for  the  company's  credit  thirty-nine 
thousand   (|39,000.00)  dollars. 

H.   K.   Chenoweth,   President. 

J.  R.  Grant,  Secretary. 

J.  A.  Cooper,  Treasurer. 
W.  F.  Chenoweth,  Director. 


vs.  NOGALES  MINING   COMPANY   ET  AL.  73 

(Seal  of  the  Nogales  Mining  Co.) 

I  concur:   R.  A.  McPherson,  March  10th,  1900. 

NOGALES.  ARIZ.,  March  9,   1901. 

Meeting  of  the  Nogales  Mining  Company's  directors 
and  stockholders  held  .n  i^octor  Chenoweth's  office 
this  9th  day  of  March,  1900,  at  5  p.  m. 

On  call  of  roll  there  were  present  a  majority  of  the 
directors  and  stockholders  in  the  persons  hereinafter 
mentioned,  namely:  u.  A.  Cooper,  J.  A.  Grant,  H.  K. 
Chenoweth,   presiaing,   and   W.   F.   Chenoweth. 

Minutes  of  previous  meeting  read  and  approved. 

Now  comes  W.  F.  Chenoweth  who  submits  a  bid  to 
furnish  the  Nogales  Miniig  Ooirpany  with  a  20- stamp 
mill  full  and  complete  on  the  ground  and  in  running 
order  and  first-class  in  every  particular  for  the  sum  of 
thirty-five  thousand  ($35,000.00)  dollars.  This  includes 
a  pumping  plant  and  pipe  line  from  the  Santo  Domingo 
River  to  mine,  sufficient  to  supply  amply  water  for  said 
mill  and  mine,  and  all  appliaricos  and  fixtures  for  run- 
ning a  first-class  20-stamp  mill,  to  be  completed  within  a 
reasonable  time. 

The  said  above  contract  was  duly  accepted,  and  the 
treasurer  was  instructed  to  hold  the  stock  of  said  W. 
F.  Chenoweth  as  security  for  the  faithful  carrying  out 
of  said  contract,  and  warrant  for  that  amount  was  or- 
dered drawn  on  the  Treasurer  in  his  favor. 

H.    K.    Chenoweth,    President. 
J.   R.  Grant,   Secretary. 
J.  A.  Cooper,  Treasurer. 
(Seal  of  the  Nogales  Mining  Co.) 
I  concur:    R.   A.   McPherson,  March   10,   1900. 


74  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL 

NOGALES,  ARIZ.,  July  2,  1900. 
At  residence  of  H.  K.  Chenoweth: 

Regular  annual  meeting  of  the  stockholders  of  the 
Nogales  Mining  Company  held  in  the  company's  office 
(which  is  at  present  the  residence  of  H.  K.  Chenoweth) 
this  first  Monday  in  July,  1900,  at  3  p.  m.  Meeting  call- 
ed to  order  and  adjourned  by  the  President  H.  K.  Chen- 
oweth, until  Monday,  July  9,  1900. 

ELISA    E.    de   CHENOWETH,    Secretary    pro.    tern. 
NOGAL.i:uS,  ARIZ.,  July  9,  1900. 

Adjourned  regular  meeting  of  the  Nogales  Mining 
Company  held  in  the  company's  office.  Called  to  order 
by  the  President,  H.  K.  Chenoweth,  at  9  a.  m.  and  ad- 
journed by  request  of  J.  R.  Grant,  to  Saturday,  July  14, 
1900,  at  10  a.  m. 

"*     W.   F.   CHENOWETH,   Secretary  pro.   tem. 
NOGALES,  ARIZ.,  July  14,  1900. 

At  company's  office  -i^e  regular  meeting  having  been 
adjourned  twice  to  this  date,  was  called  to  order  at 
10  a.  m. 

On  roll  call  it  was  found  .hat  a  majority  of  the  stock 
represented.  Minutes  of  previous  meeting  read  and  ap- 
proved. 

Election  of  officers  for  ensuing  year  declared  in  or- 
der. The  following  were  duly  elected  officers  for  the  en- 
suing term,  and  immediately  held  a  joint  m'eeting  with 
the  stockholders:  H.  K.  Chenoweth,  presideLt;  Jesse 
R.  Grant,  secretary;  W.  P.  Chenoweth,  manager;  Elisa 
E.  de  Chenoweth,  treasurer.  (Said  treasurer  to  com- 
mence her  official  position  as  soon  as  the  Board  of  Di- 
rectors secure  a  report  of  the  present  treasurer  and  ap- 


vs.  NOG  ALES  MINING  COMPANY  ET  AL.  75 

prove  her  bonds   and   J.   A.   Cooper,    direcLov,   to   serve 
until  next  regular  meeting  of  the  stockholders. 

The  following  bill  for  $7841.15  was  presented  by  W. 
F.  Chenoweth,  acting  manager,  was  duly  allowed  and 
ordered  placed  on  the  minutes "  and  a  warrant  for  the 
amount  ordered  drawn  on  J,  A.  Cooper,  treasurer,  for 
the  amount. 

Jesse  R.  Grant  and  H.  K.  Chenoweth,  President  and 
Secretary,  were  duly  authorized  to  procure  the  necessary 
funds  for  the  successful  completion  of  the  mill  and  plant 
now  under  erection,  and  are  authorized  to  mortgage  the 
company's  property  in  such  manner  as  may  seem  ad- 
visable to  them,  they  using  their  best  efforts  in  behalf 
of  the  company.     Increase  stocK  if  necessary. 

Nogales  Mining  Company, 
To  W.   F.   Chenoweth,  Acting  Manager,  Dr. 

To  money  advanced  as  per  following  account 
to  June  1st,  1900   $7841.15 

March  4,  1900.  Paid  to  J.  R.  Grant  for  money 
he  advanced  the  company  13000.00 

Maj-ch  9,  1900.  Paid  W.  F.  Chenoweth  on  con- 
tract for  erecting  plant  35000.00 

June  1,  1900.  Paid  W.  F.  Chenoweth  money  ad- 
vanced per  bill  manager  account  as  per  book 
account 1691.15 

$49691.15 

March  1,  1900.  Received  from  J.  A.  Cooper,  trea- 
surer   $    5000.00 

March  10,  1900.  Received  from  J.  A.  Cooper, 
treasurer    15000.00 


76  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

April  1,   1900.   Received  from     J.   A.     Cooper, 

treasurer    21450.00 

April  30,  1900.  Received  from  H.  K.  Chenoweth  400.00 

June  1,  1900.  Balance  due  7841,lo 


$  49691.15 
H.  K.  Chenoweth,  PresiJeni;. 
J.  R.  Grant,  Secretary. 
W.  F.  Chenoweth,  Manager. 
(Seal  of  the  Nogales  Mining  Company.) 

I  am  fully  in  accord  with  the  above  and  concur  in  the 
increase  of  the  capital  stock  to  $105,000.00. 

A.  D.  Sherwsbury. 
In  favor  of  increasing  me  capital  stock  to  $105,000.00. 
.  Jas.  tA.  Cooper. 

NOGALES,  ARIZ.,  June  15,  1900. 
H.   K.  Chenoweth,  Nogales,  Arizona. 

Dear  Sir:  This  will  authorize  you  to  vote  my  stock  by 
proxy  at  any  stockholders'  meeting  of  which  I  may  be 
absent,  or  vote  my  proxy  as  Director. 

W.  F.  Chenoweth. 
(1  10c  I.  R.  Stamp.) 

SAN  FRANCISCO,  June  15,  1900. 
To  H.  K.  Chenoweth,  Nogales,  Arizona. 

This  will  authorize  you  to  act  by  proxy  for  me  at  the 
coming  regular  stockholders'  meeting,  and  to  vote  my 
stock  at  said  regular  meeting  as  you  would  your  own. 

Very  truly, 

JESSE  R.   GRANT. 
(1  10c.  I.  R.  Stamp.) 


vs.   NOGAT.es   mining   company  ET  A1-.  77 

NOGALES,  ARIZ.,  June  15tli,  1800. 

Elisa  E,  de  Chenowetli, 

Nogales,  Arizona, 
Dear  Madam:     This  will  be  your  aufhority  for  acting 
:for  me,  by  proxy,  at  any  stockholders'  meeting  at  which 
I  may  be  absent 

Very  respectfully, 

H.  K.  CHENOWETH. 
(1  10c.  L  R.  stamp.) 


NOGALES,  ARIZ.,   Sept.   5.   1900. 
Mr.  W,  F.  Chenoweth, 

Manager  Nogales  Mining  Ca, 
Nogales,Arizona. 
Dear  Sir:    This  will  authorize  you  to  vote  our  stock  as 
you  would  your  own,  and  to  act  in  our  stead  at  any  direc- 
tors meeting,  during  our  absence  from  Nogales. 
H-  K.   CHENOWETH, 
ELISA  E.  de  CHENOWETH. 
(  1  10c  I.  R.  stamp.) 


W.  F.  Chenoweth,  Esq., 

Nogales,  Arizona. 
Dear  Sir:  This  authorizes  you  to  act,  by  proxy,  at 
first  special  meeting  that  may  be  held  by  the  stock* 
holders  of  the  Nogales  Mining  Company,  for  me,  and  to 
vote  said  proxy  on  routine  ousiness  only,  namely: 
Reading  and  approving  of  previous  meetings,  and  ad- 
journing said  special  meeting. 

Very  respectfully, 

JESSE   R   GRANT. 
<1  10c.  I.  R.  stamp.) 


1'tS-  PATITRS'IN  THE  CASE  OF  CETENOWETH  ET  AT .- 

NOGALES,  A^txZ.,  August  25,  1900; 
To  the  Board  of  Directors  of  tne  Nogales  Mining  Com- 
pany, Nogales,  Arizona. 
Gentlemen: 

At  their  laist  regular  meeting  of  the  stockholders  of 
our  company,  J.  xi.  Grant  an^  myself  were  authorized 
and  instructed  to  procure  sufficient  money  to  put  our 
plant  aBfd  haine  ©n  a  paying  basis  by  the  means  we 
thought  more  convenient  and  advantageous  at  the  earl- 
iest possible  moment.  Said  Grant  Deing  otherwise  much 
occupied,  he  delegated  me  to  attend  to  the  matter.  I 
had  in  the  meantime  sent  my  brother  to  Washington 
on  this  sa,me  mission  (money  raising),  but  he  returned 
unsuccessful  and  have  since  exerted  myself  endeavoring 
to  raise  the  money  without  resorting  to  an  increase  of 
the  capital  stock,  there  being  no  other  plan  left,  having 
tried  to  borrow  the  amount  on  second  mortgage,  on 
loans  on  my  own  stock  and  interest  in  other  mines,  etc. 
Hence  I  suggest  an  increase  in  the  capital  stock  to  avoid 
further  delay  and  perhaps  an  attachment  on  the  property 
for  monies  due.  I  suggest  it  be  by  you  increased  to 
$10,500  shares  and  the  2600  increase  be  sold  to  stock- 
holders for  one  half  par  value. 

A.  D.  Shrewsburry  for  himself,  and  in  representation 
of  S.  L.  Patterson,  D.  J.  Kyan  and  R.  E.  Doan,  whom 
I  was  depending  on  to  raise  the  necessary  funds,  recom- 
mends this  pian,  and  will  take  liOO  shares,  and  I  will 
take  the  balance, 

I  would  urge  the  importance  of  haste  in  this  matter. 
Relying  on  your  seeing  the  necessity  of  adopting  this 
plan  and  knowing  you  will  not  treat  me  unfairly,  I 
have  this  day  hypothecated  1100  shares  of  my  own  stock 
for  $5500.00,  pledging  you  to  issue  to  him  that  number 


vs.   NOGALES  MINING  COMPANY  ET  AI..  79 

H3f  shares  of  the  new  issue,  and  immediately  placed  the 
money  at  the  disposal  oi  the  company,  and  within  one 
hour  thereaiter  it  was  paid  to  Hoy  &  Titcomb,  releas- 
ing machinery  they  held,  for  that  amount,  in  Magdale- 
-na,  Mexico,  which  was  delaying  the  erection  of  the  mill. 

I  liave  done  the  best  I  could  posibly  do,  and  Tiope  you 
will  adopt  my  plan. 

Very  truly  yours, 

H.    K    CHENOWETH. 

I  concur:     A,  D,  Shrewsburry-. 


KOGALES,  ARIZ.,  August  25,  1900. 

Meeting  of  tlie  Board  of  Directors  of  the  Nogales 
Mining  Company  called  for  .  e  purpose  of  raising  funds 
t<^  pay  off  some  pressing  bills,  at  the  residence  of  H.  K. 
Chenoweth  at  1  p.  m. 

H.  K.  Chenoweth,  presiding.  A  majority  of  c.ie  direc- 
tors being  present. 

Minutes  of  previous  meeting  read  and  approved. 

W.  F,  Chenoweth  was  duly  elected  acting  secretary^ 
to  carry  out  any  instructions  of  the  meeting  and  to  act 
in  the  absence  of  the  regulariy  eiecv^^  secretary. 

H.  K.  Cnenowecu  presents  attacxxed  report,  and  on  mo- 
tion it  was  duly  accepted,  ordered  placed  on  file,  and 
the  suggestions  therein  contained  carried  out,  and  that 
the  capital  stock  be  increased  2500  shares,  making  in 
all  10,500,  ana  that  the  same  be  legally  carried  out  by 
H.  K.  and  vvT.  F.  Chenoweth,  and  as  soon  as  properly 
recorded,  that  they  issue  to  A,  D,  Shrewsburry  and 
H.  K.  Chenoweth,  the  former  1100  shares,  and  the  lat- 
ter the  oalance,  1400  shares,  as  soon  as  they  exhibit  the 
treasury  receipt  for  $5500,00  and  $7000.00  respectively. 


80  PAPJEKS  IK  THE  CASE  OP  CHENOWETH  ET  AL, 

The  contractor  and  manager,  W.  F.  Chenoweth,  re- 
ports that  the  plant  will  probably  be  in  operation  in  Sa* 
days  from  date. 

There  being  no  further  business  the  meeting  adjourned 
to  the  call  of  the  president, 

W.  F,  CHENOWETH, 
Acting  Secretary  oy  order  of  Board. 
I  concur:     Jas,  A,  Cooper,  A.  D,  Shrewsburry. 


NOGALES,  ARIZ.,  October  25,  1900, 

Meeting  of  the  Board  of  Directors  of  the  Npgales  Min- 
ing Company  held  c-^s  25th  .ay  of  October,  1900,  at  5  p.m. 

On  can  of  roll  a  majority  of  tne  uirectors  were  present. 
J.  A,  Cooper,  presiding. 

Minutes  of  previous  meeting  were  read  and  approved. 

Bill  of  W,  F,  Chenoweth  for  ^i>66.Z2  presented  and  al- 
lowed, and  ordered  spread  on  the  minutes,  and  warrant 
for  the  amount  ordered  drawn  on  the  treasurer  in  his 
favor. 

There  being  no  further  business,  the  meeting  ad- 
journed. 

W.   F.   CHENOWETH, 

Secretary  pro.  tern,  by  order  of  the  Board. 


NOGALES,  ARIZ.,  Oct.  25,  1900. 
$836.32  U.  S.  Cy. 

Nogales  Mining  Company, 

To  W.  F.  Chenoweth,  Dr. 
As  per  following  account: 

Balance  aue  June  1,  1900 $    784L15 

Paid  on  mining  account  as  per  book 


vs.  NOGALES  MINING  COMPANY   ET  AL.  81 

•  account  and  vouchers  presented  for 

March  1  to  October  1st 8027.47 

$15868.62 

U.  S.  Current  money $  836.32 

Sale  of  stock  to  A.  D.  Shrewsburry  5500.0\; 

Paid  by  warrant  June  1st,  money  account 1692.15 

Sale  of  stock  to  D.  J.  Ryan  625.00 

Sale  of  stock  to  Sam.  L.  Patterson   625.00 

Sale  of  stock  to  R.  E.  Doan  500.0u 

Sale  of  stock  to  H.  K.  Chenoweth  5250.00 

Draft  on  James  A.  Cooper   841.15 

$15868.62 
We  owe  at  this  date  bills  to: 
M.  Latz  &  Bro.,  for  August  and  September. 
Roy  &  Titcomb,  about  $1000.00. 
A.  Ullman,  one-half  of  his  salary  for  September. 
,     J.  Burns,  salary  for  August  and  September. 
J.  Leonard,  part  of  his  salary  for  September. 

F.  Mendez,  for  wood. 

For  survey  on  Grant  mine. 

G.  Heinecke,  for  September  bill. 
Ed.  Noon,  for  September  bill. 

H.  E.  Stevens,  salary  for  July,  August  and  Septembej. 
J.  J.  Chatham,  salary  for  September. 

W.  F.  CHENOWETH,  Manager. 
We  have  audited  and  found  it  correct:     Jas.  A.  Coop- 
er, A.  D.  Shrewsburry. 


NOGALES,  ARIZ.,  Jan.  12.  1901. 
Meeting  of  the  Board  of  Directors  of  the  Nogales  Min- 
ing Company  held  in  the  Montezuma  Hotel  at  8  p.  m. 


82  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL 

Minirtes  of  previous  meeting  read  and  approved.  , 

On  call  of  roll  a  majority  of  the  directors  were  present. 
Major  James  A.   Cooper,  presiding. 

Resignation  of  Jas.  A.  Cooper,  received,  accepted  ana 
R.  E.  Doan  nominated  and  duly  elected  in  his  stead. 

There  being  no.  further  business  the  meeting  closed. 
JESSE  R.  CjxiANT,  Seretary. 


NOGALES,    ARIZ.,    Jan.    12,    1901. 

At  a  meeting  of  the  stockholders  of  the  Nogales  Min- 
ing Company  held  at  Nogales,  Arizona,  on  this  l-ih 
day  of  January,  A.  D.  1901;  present  all  of  the  stockhold- 
ers of  the  shares  of  stock  of  said  company.  On  motion, 
duly  seconded  and  put,  it  was  resolved  by  a  unanimous 
vote  of  said  stockholders  as  follows,  viz: 

Resolved,  that  Article  5th  of  the  Articles  of  Incorpora- 
tion of  this  company,  be  amended  to  read  as  follows, 
to-wit: 

"Article  Fifth:  The  amount  of  the  capital  stock  oi 
this  company  shall  be  Five  Hundred  Thousand 
($500,000.00)  dollars,  divided  into  fifty  thousand  shares, 
of  the  par  value  of  Ten  ($10.0v;j  dollars  each,  to  be  paid 
for  at  time  of  issuing  the  certificate  for  the  same." 

It  was  in  like  manner  resolved  that  the  president  and 
secretary  be  and  they  are  hereby  authorized  and  directed 
to  issue  of  said  stock  so  increased  by  sajd  amendment 
of  Article  B  if th. 

First,  to  the  C^rro  Prieto  Mining  Company  of  the 
Republic  of  Mexico,  twenty-one  thousand  (21,000)  shares. 

Second,  to  the  present  stockholders  of  the  stock  of  the 
iNOgales  Mining  Company,  in  proportion  to  their  present 
respective  holdings,  ten  thousand  five  hundred  (10,500) 
shares. 


vs.  NOGALES  MINING  COMPANY  ET  AL.  83 

And  that  the  remaining  eight  thousand  (8000)  shares 
of  said  stock  remaining  in  the  treasury,  to  be  sold  at 
not  less  than  par  and  that  the  proceeds  of  such  sale  to 
be  used  as  assets  of   -  --o  company. 

It  was  in  like  manner  resolved  that  of  the  said  8000 
shares  of  treasury  stock  held  as  assets,  five  hundred 
shares  be  issued  by  the  president  and  secretary  to 
R.  E.  Doan,  in  payment  of  professional  services  rendered 
to  this  company. 

It  was  in  like  manner  resolved  that  the  general  mana- 
ger and  secretary,  be  and  they  are  hereby  authorized 
and  directed  to  issue  and  deliver  to  Henrietta  Stuart,  of 
Washington,  D.  C,  payable  to  her  or  her  order,  the  prom- 
issory note  of  this  company  for  the  sum  of  eight  thous- 
and five  hundred  ($8,500.00)  dollars,  to  be  dated  Jan. 
12,  1901,  payable  six  months  after  date  with  12  per  cent 
interest  from  date. 

The  report  of  the  Board  of  Directors  made,  read, 
approved  and  ordered  filed. 

Bill  of  W.  F.  Chenoweth  presented  and  approved  as 
audited,   $2,823.77,   and   ordered    filed. 

Report  of  James  A.  Cooper  presented,  read  and  ap- 
proved, au -ited  and  ordered  fileu,  showing  there  to  be 
due  to  him  the  sum  of  $196.17. 

JESSE   R.   GRANT. 

A.  D.  SHREWSBURRY. 

DANIEL  J.   KxAN. 

SAMU£.i^   L.   PAl  TERSON. 

JAMES  A.  COOPER. 

R.   E.  DOAN. 

W.    F.    CHENOWETH. 


84  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

ELISA  E.  de  CHENOWETH,  by  W.  F.  Chenoweth, 
proxy. 

H.  K.  CHENOWETH,  by  W.  F.  Chenoweth,  proxy. 


You  are  hereby  notified  that  the  condition  of  affairs 
of  the  Nogales  Mining  Company,  of  which  you  are  a 
stockholder,  are  such  as  to  render  a  special  meeting 
of  its  stockholders  necessary,  and  that  such  meeting  will 
be  held  at  the  office  of  said  company  in  the  town  of  No- 
gales,  Arizona  Territory,  the  place  designated  in  the 
articles  of  incorporation  for  the  transaction  of  Its  bu- 
siness; on  the  6th  day  of  April,  A.  D.  1901,  at  10  o'clock 
a.  m.,  the  subject  of  which  meeting  is  the  election  of  a 
new  Board  of  Directors  and  the  transacting  of  other  such 
business  as  the  affairs  of  the  company  may  require. 

I  hereby  certify  that,  the  president  and  vice-president 
of  the  company  being  absent  from  the  territory,  I  give 
this  notice  as  secretary  at  the  request  of  the  stockhold- 
ers owning  a  majority  of  - -e  stock  of  said  company. 

JESSE  R.  GRANT. 

In  response  to  the  above  notice,  a  meeting  of  the  No- 
gales  Mining  Company  was  held  at  the  office  of  the 
company,  and  owing  to  the  fact  that  a  majority  of  the 
stock  of  the  company  was  not  represented,  the  meeting 
was  adjourned  to  meet  at  10  o  clock  a.  m.  of  April  10, 

1901. 

JESSE  R.  GRANT,  Secretary. 

The  adjourned  meeting  of  the  stockholders  of  the  No- 
gales  Mining  Company  was  held  at  the  oflEice  of  the  com- 


TS.   NOGALES  MINING   COSfPAKY  ET  Al..  85 

pany  in  Nogales,  Arizona,  this  10th  day  of  April,  1901, 
at  10  o'  clock  a,  m. 

Meeting  called  to  order  by  the  secretary,  Jesse  R. 
KJrant 

It  was  agreed  that  as  the  ofrice  of  the  company  has  not 
^iDeen  used  for  some  time,  and  most  of  tne  furniture  mov- 
^ed  away,  the  office  of  .he  company  should  he  moved  to 
Dr.  i^'erguson's  office,  where  the  meeting  was  held. 

There  were  present  at  the  meeting: 

Jesse  R.  Grant,  owning  1398  snares, 

James  A,  Cooper,  owning  1630  shares. 

James  A.  Cooper,  by  proxy  of  R.  E.  Doan,  120  shares. 

R.  A-  McPherson,  owning  10  shares. 

Ray  i^erguson,  owning  1  shara 

Ohas,    -.  -..icnards,  owning  1  share.    Total  4160  shares. 

The  attorney  for  W,  F.  Chenoweth  presented  a  certi- 
ficate for  10  sliares  standing  tn  the  name  of  W.  F.  Chen- 
oweth, but  as  he  had  no  proxy  from  the  owner,  he  was 
not  permitted  to  vote,  but  remained  through  the  meeting. 

As  4160  shares  is  more  than  a  majority  of  the  legally 
issued  stock  of  the  company,  the  meeting  was  called  to 
order  by  Jesse  R.  Grant. 

On  motion  duly  seconded,  Ray  Ferguson  was  elected 
president  of  the  meeting,  and  Chas.  O.  Richards,  secre- 
tary. 

Mr.  Grant  stated  that  the  object  of  the  meeting  was  to 
elect  a  Board  of  Directors  to  take  the  place  of  those 
■elected  at  the  annual  meeting  held  July,  2,  1900.  as  the 
board  elected  at  the  annual  meeting  were  not  managing 
the  business  of  the  company  in  a  proper  manner, 

Mr.  Grant  placed  in  nomination  James  A.  Cooper,  H. 
K.    Chenoweth,    R.    A.    McPherson,    Ray    Ferguson    and 


^  PAPERS  IN  THE  CASE  OF  CSENOWETS  ET  AL. 

Chas.  O.  Richards,  to  act  as  directors  until  the  next  an^ 
nual  meeting. 

Ray  Ferguson  seconded  the  nominations.  No  other 
nominations  were  made. 

All  stock  present,  namely,  4160  shares,  was  voted 
for  those  above  named,  and  they  were  creclared  elected. 

On  motion  of  Mr.  Qrant,  the  Board  of  Directors  were 
instructed  td  appoint  a  new  manager  to  take  charge  of 
the  mine  and  milL 

A  committee  consisting  of  Ray  Ferguson  and  C.  O. 
Richards  was  appointed  to  draft  by-iaws  and  investi- 
gate all  the  affairs  of  the  company,  and  make  their  re- 
port at  the  annual  meeting  of  the  company. 

G.  O.  RICHARDS,  Secretary. 


NOGALES,  ARIZ,,  April  10,  1901. 

At  a  meeting  of  the  Board  of  iJirectors  of  the  Nogales' 
Mining  Company  held  in  the  office  of  the  company  in 
Nogales,  Santa  Cruz  County,  .-rizona,  on  the  10th  day  of 
April,  1901,  «it  10:45  a.  m,,  the  following  business  was 
transacted. 

By  consent  of  the  members  present  Ray  Ferguson 
tvas  made  temporary  chairman  and  Chas,  O.  Richards, 
temporary  secretary,  for  the  purpose  of  organizing. 

On  call  of  roll  the  members  found  to  be  present  were; 
Jas.  A.  Cooper,  R.  A.  McPherson,  C.  O,  Richards  and 
Ray  Ferguson. 

On  motion  of  C.  O,  Richaras,  seconded  by  R,  A.  Mc- 
Pherson, Mr.  Jas.  A.  Cooper  was  elected  president  of  the 
board.  The  members  voting  aye  being:  R.  A.McPherson, 
C.  O.  Richards,  Ray  Ferguson  and  James  A.  Cooper. 

On  motion  of  C.  O.  Richards,  seconded  by  R.  A.  Mc- 
Pherson, Mr.  H.   K.  Chenowech  was  elected  vice-presi- 


vs.   NOG  ALES  MINING   COMPANY  ET  AL.  87 

dent.    The  members  voting  aye  being:  R..  A.  McPherson, 
'C.  O.  Richards,  Jas.  A.  Cooper  and  Ray  Ferguson. 

On  motion  of  o.  O.  Ricliarus,  seconded  by  Jas.  A.  Coop- 
■er,  Ray  Ferguson  was  elected  secretary  and  treasurer. 
The  members  voting  aye  being:  R.  A.  McPherson,  C.  O. 
Richards,  James  A.  Cooper  and  Ray  Ferguson.  The 
board  being  now  organized  and  the  officers  installed, 
business  was  transacted  as  follows: 

In  response  to  instructions  received  from  a  majority 
'o''  the  stockholders  of  the  Nogales  Mining  Company  in 
meeting  assembled  on  April  10th,  1901,  at  10  o'clock  a. 
m.,  a  copy  of  the  proceedings  being  on  file  in  said  office, 
action  was  taken  towards  the  election  of  a  manager  of 
the  company. 

On  motion  of  R.  A.  McPherson,  seconded  by  Ray  Fer- 
guson, Mr.  C.  O.  Richards  was  elected  manager  for  the 
Nogales  Mining  Company  for  Mexico  and  the  United 
States.  The  members  voting  aye  being:  Jas.  A.  Cooper, 
R.  A.  McPherson  and  Ray  Ferguson. 

On  motion  of  R.  A,  McPherson,  seconded  by  Ray  Fer- 
guson, the  manager  was  and  is  authorized  anl  empow- 
ered to  take  such  action  as  he  may  aeem  necessary  to 
gain  possession  of  all  property  of  the  company  in  a  legal 
iind  business  like  manner,  and  that  he  is  further  author- 
ized to  take  whatever  action  he  deems  best  in  opei^ating 
the  mines,  mill,  pumping  plant  and  other  property  of  the 
company.  The  members  voting  aye  being:  Jas.  A.  Coop- 
er, R.  A.  McPherson  and  Ray  i^erguson. 

On  motion  of  C.  O,  Richards,  the  secretary  was  author- 
ized to  purchase  a  book  for  recording  the  minutes  of 
meetings  of  the  board. 

There  being  no  further  business,  the  meeting  was  ad- 
journed at  the  call  of  the  president 

RAY  FERGUSON,  Secretary. 


8S  PAPERS  lx\  THE  CASE  OP  CHENOWETH  ET  AL. 

NOGALES,    ARIZ.,    April    15,    1901. 

Meeting  of  the  Board  of  Directors  of  the  Nogales  Min- 
ing Company  held  at  the  office  of  the  company  on  ^prir 
15th,  1901. 

Present:  Jesse  R.  Grant,  C,  O.  Richards,  James  A.. 
Cooper,  Ray  Ferguson.  Minutes  of  previous  meeting^ 
read  and  approved. 

Resignation  of  H.  K.  Chenoweth  as  a  member  of  the 
Board  of  Directors  and  as  vice-president  of  the  board, 
read  and  accepted. 

Motion  of  C.  0.  Richards,  seconded  by  Ray  Ferguson, 
Jesse  R.  Grant  was  elected  member  of  the  Board  of  Di- 
rectors to  fill  the  vacancy  caused  by  the  resignation  of 
H.  K,  Chenoweth, 

C.  O.  Richards,  manager,  reports  the  mine  and  mill  in 
the  possession  of  the  company  an-  this  board,  and  states- 
tliat  the  ^iiU  ]ias  been  shut  down  for  repairs,  and  that 
it  will  probably  be  ninety  days  before  it  can  be  put  in 
goo4  working  order.  He  states  tnat  the  development 
of  the  mine  is  being  pushed  ahead,  working  tunnel 
being  driven  inward,  connections  between  tunnel  No. 
1  and  No.  2,  and  between  No.  2  and  No.  3,  being  made 
to  facilitate  uandling  of  ore. 

Mr.  Richards  was  instructed  to  employ  an  attorney 
to  assist  him  in  legal  questions  at  a  salary  of  $100.00 
Mexican  silver  per  month. 

Statement  of  aebts  owing  by  the  company  was  receiv- 
ed  from   Dr.   Chenoweth  and  ordered   filed. 

On  motion  of  Mr.  Grant,  seconded  by  Ray  Ferguson, 
Mr.  C.  O.  Richards  was  empowered  to  investigate  all  of 
the  accounts  of  labor  and  supplies  furnished  as  per  state- 
ment of  W.  F.  Chenoweth,  and  to  act  as  seems  best  in 
his  judgment  in  the  settlement  of  the  same,  and  for  the 


vs.  NOGALES  MINING  COMPANY  ET  AL.  89 

company  to  refund  all  moneys  used  by  said  Richards  in 
settlement  of  claims. 

On  motion  of  Mr. 'J.  R.  Grant,  seconded  by  Mr.  Rich- 
ards, it  was  resolved  to  retain  Mr.  Pedro  Trellas  as 
book-keeper  at  the  mine  on  a  salary  of  $120.00  gold  per 
month,  for  the  present. 

On  motion  of  J.  A.  Cooper,  seconded  by  Mr.  Grant, 
it  was  resolved  to  empower  Mr.  C.  O.  Richards  to  ar- 
range for  $5000.00  to  be  expended  for  supplies  in  work 
of  developing  the  mine,  repairing  mill  and  pump,  the 
same  amount  to  be  repaid  with  interest  from  the  lirst 
funds  received  by  the  company.  Ayes:  Cooper,  Grant 
and  Ferguson. 

Mr.  Riciiards'  salary  was  then  fixed  at  $300.00  per 
month,  until  such  time  as  the  mill  is  producing,  when 
he  will  expect  an  increase. 

On  motion  of  C.  O.  Richards,  seconded  by  J.  R.  Grant, 
the  secretary  was  instructed  cO  call  upon  W.  F.  Cheno- 
weth,  as  manager,  and  Elisa  E.  de  Ohenoweth,as  treas- 
urer, and  upon  J.  A.  Cooper,  as  former  treasurer,  for 
a  report  of  all  monies,  checks,  drafts,  bullion,  etc.,  pass- 
ing through  their  hands,  together  with  voucher  for 
same.    Ayes:     Grant,  Cooper,  Richards,  Ferguson. 

Mr.  Kichards  suggested  that  ail  the  stockholaers  be  in- 
formed of  condition  of  mine,  mill,  etc.,  anc  says  that  at 
the  annual  meeting  or  sooner  he  will  give  a  detailed 
report  of  all  property  of  tne  company,  and  furnish  full 
statement  as  to  condition,  etc. 

J.  A.  Cooper  aumorized  the  secretary  to  transfer  25 
shares  of  stock  standing  in  his  name  to  S.  vv^.  Briggs. 
and  2  shares  to  Aaron  TownsSend,  both  of  Washington, 
D.  C. 

On  motion  of  Mr.  Grant,  seconded  by  Mr.  Richards, 


90  PAPERS  IN  THE  CASE  OF  CHEXOWETPI  ET  AL, 

R.  A.  Mcrherson  was  elected  vice-president  to  succeed 
H.    K.    Chenoweth,   resigned. 

Contract  of  J.  R.  Grant  attached. 

KAY    FE±tGUSON,    Secretary. 


NG^ALES,  ARIZ.,  ^vprll  12,  1901. 

Memorandum  of  an  agreement  entered  into  this  12th 
day  of  April,  1901,  by  and  between  W.  F.  Chenoweth 
and  H.  K.  Chenoweth,  parties  of  the  first  part,  and  Jesse 
R.  Grant,  party  of  the  seco.      part. 

Witnesseth:  That  in  consideration  of  five  thousand 
dollars  U.  S.  current  money,  to  be  paid  to  the  party  of 
the  first  part  by  the  party  of  the  second  part,  the  said 
party  of  the  first  part  agrees  to  sell,  transfer  and  assign 
to  the  said  party  of  the  second  part  all  their  right,  title 
and  interest  in  all  of  the  stock  owned  by  them  in  the 
Nogales  Mining  Company,  a  corporation  formed  under 
the  laws  of  the  territory  of  Arizona,  and  having  its  prin- 
cipal ofllce  in  Nogales,  Arizona,  reserving  only  such 
stock  as  represents  700  snares  out  of  the  50,000,  which 
interest  we  have  previous  to  this  agreement  contracted 
to  deliver  to  other  parties. 

Further,  it  is  agreed  that  this  contract  shall  not  con- 
flict with,  but  shall  oecome  a  part  of  a  certain  contract 
and  agreement  entered  into  on  the  11th  day  of  April,  1901, 
in  the  City  of  Hermosillo,  for  the  transfer  of  50  shares 
of  stock  in  the  Cerro  Prieto  Co.,  a  corporation  existing 
under  the  laws  of  the  State  of  Sonora,  Republic  of  Hex 
ico,  whereby  the  full  amount  the  parties  of  the  first  part 
shall  receive   is   Thirty-five  Thousand    ($35,000.00)    dol- 


vs.  NOG  ALES  MINING  COMPANY   ET  AL.  91 

lars  U.  S.  gold  coin,  and  this  document  is  a  receipt  for 
Five  Thousand  ($5000.00)  dollars.  The  other  Thirty 
Thousand  ($30,000.00)  dollars  shall  oe  paid  within  six 
months  from  the  date  of  signing  the  contract  with  the 
Cerro  Prieto  Mining  Co.  before  mentioned,  viz:  the  11th 
day  of  April,  1901,  making  this  contract  or  agreement 
void  after  October  11th,  1901. 

Further,  it  is  agreed  that  the  party  of  the  second  part 
accepts  this  contract,  relieving  the  parties  of  the  first 
part  from  all  responsibility  and  further  agrees  to  carry 
out  all  legal  contracts  and  pay  all  legal  bills.  Further 
the  party  Oi  the  first  part  agrees  to  see  that  a  certain  op- 
tion given  to  one  R.  A.  McPherson,  by  one  of  the  par- 
ties of  the  first  part  on  or  about  Feb.  25th,  1901,  and 
which  said  first  party  considers  void,  but  in  order  to 
avoid  the  expense  of  defending  any  suit  said  McPherson 
might  instigate,  said  second  party  agrees  to  have  said 
option  duly  cancelled  and  does  hereby  relieve  said  first 
party  from  all  reliability. 

Further,  the  parties  of  the  first  part  hereby  direct  the 
secretary  of  the  Nogales  Mining  Company  to  enter  the 
contents  of  this  contract  on  the  books  of  the  company 
ind  we  authorize  said  secretary  to  accord  to  said  second 
party,  the  full  voting  power  of  tae  stock  owned  by  the 
said  first  parties  during  the  term  of  this  contract,  and 
upon  the  fulfillment  of  the  same,  to  cancel  said  stock  as 
represented  in  this  contract  and  reissue  the  same  to  the 
said  second  party. 

Further,  the  said  first  parties  do  hereoy  authorize  the 
secretary  of  the  Nogaies  Mining  Company  to  enter  on 
the  books  of  the  company  the  resignations  as  directors 
and  officers  of  said  company  the  names  of  W.  F.  Cheno- 


92  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL, 

wetn,   H.    K.    Chenoweth   and   Elisa   E.    de   Cnenoweth, 
said  resignations  to  date  from  April  9th,  1901. 

JESSE  R.  v^RANT. 

W.  F.  CHENOWETH. 

H.  K.  CHENOWETH. 

ELISA  E.  de  CHENOWETH. 
Witness:     Jas.  A.  Cooper. 


TERRITORY   OF    ARIZONA, 
COUNTY   OF    SANTA  CRUZ       '' 


I, ,  a  notary  public, 

in  and  for  tlie  County  of  Santa  Cruz,  Territory  of  Ari- 
zona, duly  commissioned  and  sworn,  do  hereby  certify 

that  the  foregoing  document  consisting  of 

pages,  on  the  margin  of  which  I  have  written  my  name. 
is  a  full,  true  and  correct  copy  of  the  minutes  of  the 
Nogales  Mining  Company,  as  contained  in  the  minute 
books  of  said  company,  exhibited  to  me  by  the  secretary 
of  said  company,  from  the  date  of  the  organization  of 
said  company  to  this  22nd  day  or  June,  A.  D.  1901,  and 
that  the  foregoing  was  by  me  carefully  compared  with 
the  original  entries  on  said  minute  books. 

Given  under  my  hand  and  seal  of  office,  at  my  office  in 

Nogales  in  said  county,  this day  of 

A.  D.  1901. 


Notary  Public. 
My   commission    expires 


vs.   NOGALES  MINING  COMPANY  ET  AL.  93 


Abstract  of  Argument  for 
Temporary  Receiver. 


Brief  summary  of  argument  of  Rochester  Ford  and 
Frederick  S.  Nave  for  the  appointment  and  retention  of 
a  receiver  to  conserve  property  of  the  Nogaies  Mining 
Company,  pending  final  judgment. 

The  obligations  of  the  company  appear  from  the 
pleadings  to  be  in  excess  of  eighty  thousand  dollars,  the 
maximum  indebtedness  as  limitea  by  the  articles  of  in- 
corporation of  the  company.  The  plaintiffs  are  person- 
ally interested  in  preserving  to  its  highest  the  security 
for  the  obligations  of  me  company,  oecause  their  stock 
m  the  company  is  pledged  as  security  for  the  payment 
of  the  loan  ot  $50,000  made  -y  Mrs.  Stuart,  ana  the  plain- 
tiff H.  K.  Chenoweth  is  an  endorser  of  the  company's 
note  to  Mrs.  Stuart  in  that  amount.  Further,  it  is  alleg- 
ed in  the  pleadings  that  the  company  is  indebted  to 
plaintiff  W.  F.  Chenoweth  approximately  in  the  amount 
of  $4000.  It  appears  to  be  conceded  in  the  pleadings  of 
both  parties  that  the  property  of  the  company  is  of  such 
character  that  upon  forced  sale,  but  little  can  oe  realized 
from  it,  a  valuation  of  but  $10,000  being  placed  upon  it  in 
the  pleadings.     Therefore  it  is  conspicuously  clear  that 


^  PAPERS  IN  THE  CASE  OF  CHENOWETH  ET  AL. 

:is  matters  stand  at  present  the  company  is  insolvent. 
It  is  an  establisned  rule  o.  law  that,  with  limitations,, 
the  directors  of  an  insolvent  corporation  must  handle- 
its  property  sLs  trustees  for  the  benefit  of  its  creditors. 
Thomp.  Corp.  4132  et  seq.     Limitations  have  been  placed 
upon  the  oroad  uoccrine  as  formerly  held,  but  the  fidu- 
ciary relation  cleariy  arises  on  the  conceded  facts  of  this 
case.     The  defendant  C.  O.  Richards  is  a  director  and 
manager  of  the  company,     it  is  admitted  by  him  under 
oath  that  a  moTcgage  was  given  to  him,  encumbering 
the  property  of  the  company,  to  secure  a  loan  to  the 
company  as  alleged  in  the  sum  of  $15,000,     The  result 
of  this  mortgage  was  to  place  him  in  a  position  of  pre- 
ference  as   against   all   other   creditoTs,   which,   at   the 
best,    and    under   the   most   lenient   holdings    of   courts 
seems  a  doubtful  act,  and  probably,  with  no  other  aoubt- 
fiil  matters  to  weaken     .s  posit-on,  an  act  which  credit- 
ors can  successfully  oppose.     But  the  making  of  thi^ 
mortgage  was  confessedly  followed  within  a  very  short 
time^-Within  a  tew  weei...,    -^  will  be  seen  by  a  compu- 
tation based  on  the  several  facts  alleged— by  a  proceed- 
ing to  foreclose  it,     xhe  result  of  foreclosure  sale  woula 
manifestly  be  uiat  the  proceeds  would  not  even  pay  out» 
the  $15,000  alleged  to  ^e  secured  by  the  mortgage,  and 
would   leave   otner   creditors,   whose   credits   aggregate, 
apparently,  over  $70,000,  withouc  remedy,  or  possibility 
of  recovery  of  their  money  except  that  Mrs.  Stuart  would 
have   recourse   upon   the   plaintilf   H.     K.     Chenoweth. 
Should  the  mineral  resources  of  . -e  property  afterwards 
be  found  of  value,  the  purchaser  under  the  foreclosure 
sale   could   become   wealthy,    while    the   persons   whose 
money  made  possible  the  aevelopment  of  the  property, 
erected  the  mill,  pumping  plant,  etc.,  lose  their  entire 


TS.    NOGALES    MINING    COMPANY  ET  Al..  95 

Investment.  Defendants  show  a  further  wilful  disre- 
gard of  the  r.ghts  of  the  plaintiffs  by  refusing  to  recog- 
nize them  as  stockholders,  or  to  extend  them  their  rights 
as  such  stockhOx-  ers.  Whether  tlie  acts  of  Richards  are 
supported  by  a  majority  or  minority  of  the  stockholder 
ifi  immaterial.  A  majority  of  . -e  stockholders  have  no 
right  to  unite  in  ihe  destruction  of  the  property  of  the 
cojporation,  and  sale  under  foreclosure  would  amount 
to  that.  The  rignts  of  lae  minority  will  be  protected  by 
courts  of  equity,  as  also  the  rights  of  creditors,  and 
ppending  fina.  adjudication  of  the  question  of  the  vali- 
dity of  tne  mortgage  to  Richards,  of  the  validity  of  the 
obligation  it  purports  to  represent,  and  of  the  rights 
■of  plaintiffs  as  stockholders  and  creditors,  the  court 
cannot  refuse  to  take  the  company's  property  unaer  its 
protection  and  protect  it  from  the  acts  of  the  board  of 
directors.  Consol.  Tank  Line  vs.  Kas.  City  Varnish  Co. 
43  Fed.  204;  State  vs.  Dist.  Court,  39  Pac.  316;  Cameron 
vs.  Groveland  Imp.  Co.  54  Pac.  1128;  State  vs.  Dist. 
Court  56  Pac.  219.  xne  alleged  agreement  to  defer  all 
action  on  the  mortgage  for  two  years  cannot  alter  the 
obligation  of  the  court  to  keep  custody  of  the  property, 
pending  final  judgment  The  record  discloses  numerous 
agreements,  the  observing  of  which,  or  failure  to  observe 
which  seems  to  be  the  fundamental  cause  of  all  the 
difficulties  between  the  parties.  The  Court  should  tem- 
porarily enjoin  the  foreclosure  of  Richards'  mortgage, 
pending  final  judgment;  ana  should  hold  in  its  own  im- 
partial control  tne  property  of  the  company.  Keep- 
ing any  of  the  parties  from  affecting  the  rights  of  any 
of  the  others  or  from  endangering  the  safety  of  all  the 
creditors,  until  such  time  as  tne  rights  of  all  shall  be 
finally  ascertained  by  the  Court,  and  each  one  placed 
in  possession  of  his  rigats. 


